Be alert to pension scams

STOP! If you’re offered early access to your pension or a transfer to a scheme that seems too good to be true, chances are, it is.

What’s a pension scam?

There are people out there with a variety of tricks up their sleeves to try and hook you into transferring your pension funds into bogus schemes. This could result in you losing your entire retirement savings and you could face hefty tax charges too.

How can you recognise the warning signs?

Cold calling about pensions is illegal and a likely sign of a scam. Cold calls used to be scammers’ most common method of approach. But since the cold-call ban was introduced in 2019 their tactics have evolved.

Some have moved to sophisticated online models, making contact through social media, or will use friends and family to reach clusters of people. Others will rely on established practices like offering a free pensions review.

It’s vital that you keep up to date with current and evolving scam tactics and get to know the signs of a scam.

Don’t put yourself at risk, look out for the following:

  • Contacting you out of the blue
  • Offering free pension reviews and one-off investment opportunities with ‘guaranteed’ or higher returns
  • Offering you cash upfront, cash back or a loan facility
  • Speeding up the transfer of money over to the new scheme
  • Claiming you can access your pension pot before the age of 55 (57 from 2028)
  • Providing no copy documents
  • A professional looking website and convincing marketing material, but their content is unclear or misleading

It’s good to note that well-known companies or government-backed bodies won’t ever phone or text you to offer a pension review.

And remember – we will never contact you out of the blue to ask for any of your personal or account information, such as your bank details, password or sign-in details.

Take a look at the Financial Conduct Authority’s webpage ScamSmart, to find out if you’ve been offered a scam in the form of an ‘investment deal’.

Avoid Pensions scams

The Pensions Regulator website has very useful information on how to avoid pension scams. We also strongly recommend downloading the ‘Don’t let a scammer enjoy your retirementScamSmart leaflet, which explains how to avoid pension scams in 4 easy steps.

Don’t be fooled

They may even tell you that the government has asked them to contact you and some of these advisers or their firms can be Financial Conduct Authority regulated, always double check before you sign a thing – use the contact details below if you are unsure.

You can lose a lifetime’s worth of saving. So stop and ask yourself:

“Could this be too good to be true?”

You can check if an adviser is registered by visiting the Financial Conduct Authority website.

Want to know more about pension scams?

Visit the MoneyHelper website.

If you’re living in England, Northern Ireland or Wales and need to report fraud and cybercrime that has already happened, reach out to Action Fraud or call 0300 123 2040. If you’re living in Scotland, you should call Police Scotland on 101 or Advise Direct Scotland on 0808 164 6000.

Getting in touch with your pension provider in time might also prevent any unwanted transfer from going out.

Take your time

Don’t forget, hasty decisions about your pension savings could have a big impact on your future. Pensions are invested, so can be affected by major changes in the markets. Sometimes, it might be best to wait before you access your pension savings, as you might miss out on any increases in value if markets recover. It’s a good idea to focus on your needs in the long term rather than on current events, and to take advice before making decisions.

If you’re experiencing financial difficulties, it’s worth exploring any other savings you might have before taking your pension savings and looking at what other sources of support are in place.

More information can be found on the MoneyHelper website. MoneyHelper also has a debt advice locator tool to help you find out where you can go to get free debt advice.