With scams more sophisticated than ever, you are still the best line of defence when it comes to keeping your pension safe.
That’s why it’s vital you remain vigilant and know how to:
- spot the signs of a pensions scam;
- know how to report one; and
- know what to do if you think you’ve been a victim of one.
Sam’s story
Sam received an offer he thought he couldn’t refuse.
Someone called him to offer a ‘free pensions review’. He thought he was speaking to an established company, promising better returns on his pension savings and the possibility of receiving his benefits early. It felt like something he couldn’t miss out on.
The ‘established company’ had a slick website that looked exactly like the pension websites he’d seen before. The man on the phone let Sam know the benefits of moving his pension savings into a more attractive scheme, and that the sooner he moved his savings the better.
The fact that Sam was being pressured set alarm bells ringing. He decided to get in touch with his pension scheme and they reassured him that rules are in place for trustees and scheme managers, monitored by The Pensions Regulator, to make specific checks before complying with requests to transfer pension savings. They’ve also provided an ‘amber’ and ‘red’ flag system – where transfers won’t be able to go ahead in certain circumstances. Sam was advised to visit ScamSmart or call the Financial Conduct Authority (FCA) on 0800 111 6768 to see if the company was authorised.
Sam was also advised to report the scam to Action Fraud or by calling 0300 123 2040.
Remember:
Pensions cold calling is illegal
Pensions cold calling is illegal
A genuine company would never contact you out of the blue to offer you a free pension review or an exciting pensions opportunity. Cold calling to sell pensions products has been illegal in the UK since 2019, so if anyone does phone you, just end the call.
That doesn’t mean that criminals have stopped trying to separate people from their pensions – they’re just getting around the legislation by contacting by email, text or social media instead – so stay vigilant.
Don’t give in to pressure
Scammers often try to pressure people into making decisions quickly so you don’t have time to do your research or get regulated financial advice.
Be wary of certain investments
Some investment types aren’t regulated by UK law, so if you invest in them you might not be able to trace your money. These often include overseas property or hotels, renewable energy bonds, forestry, parking spaces and storage units.
Guaranteed high investment returns don’t exist
No investment will ever provide returns that are guaranteed to be high. Even the best-performing investments can lose value from time to time. If it sounds too good to be true, it probably is.
You usually can’t take your pension early
By law, you can’t access your pension until you reach age 55 (this is rising to age 57 in 2028), unless you’re in very ill health or have a protected pension age, without incurring a significant tax penalty. There is no loophole.
Beware of hidden charges
If you are being asked to transfer your pension into another pension arrangement, it’s important to understand how much you’ll be charged and the impact the charges could have on your pension pot.
Check the FCA register
Most financial services firms have to be authorised by the Financial Conduct Authority (FCA). Check their Financial Services Register to see if a firm or individual is authorised by the FCA to provide the advice that they want to give to you.
Always access the Register from the FCA’s website rather than by clicking on links in emails or on the website of a firm offering you an investment, and check if the firm’s contact details and registration number match the ones on the Register.
If you’re suspicious, report it
If you think you’ve been approached by scammers, you can report the firm or the scam to the FCA by calling 0800 111 6768 or using the FCA’s reporting form.