Keeping your pension pot safe from pension scammers

pension scams

More than £42m has been lost to ‘pension liberation fraud’1 or pension scams since the April 2014 pension freedoms announcement. Pension scams actively target people’s pension funds and statistics are indicating a sharp increase in this type of fraudulent activity. So how do you protect yourself? Being aware of the warning signs and always erring on the side of caution is a good approach. We have listed some situations that could indicate that you may be being targeted by pension scammers:

Someone contacts you unexpectedly about transferring your pension

Cold calls on the telephone, unsolicited emails or texts, or a visit in person from a ‘representative’. Scammers may claim to be from Government-backed organisations, financial providers or advisers, but these bodies would never phone or text you to offer to transfer your pension.

You are contacted by someone who wants your personal or financial details

These people may claim to be from the Government or a financial institution. DO NOT GIVE THEM ANY DETAILS and hang up the phone.

You are offered the chance to access your pension pot before the age of 55

It is more than likely that this is a pension scam.

You are being encouraged to take out a large lump sum, or your whole pension pot

It is unlikely that any genuine source would actively pressure you into taking large amounts of money from your pension.

You are being offered an investment opportunity that looks too good to be true

Always be mindful of investments described with keywords such as ‘unique’, ‘overseas’, ‘environmentally friendly’, ‘ethical’ or in a ‘new industry’ or ‘new hotel’ in an exotic location. Thoroughly research any scheme before proceeding.

You are being pressured into making a decision or completing paperwork

Sometimes scammers will tell you have to decide right away or you will miss out on an opportunity. They may even use a courier or representative to deliver paperwork to you. They will wait until you have signed the documents, pressurising you into not reading things properly. Most genuine organisations would not employ this type of tactic.

You’ve been ‘recommended by a friend’

Check everything out for yourself and research what you’ve been told before acting.

Change to provider bank details

Never act on calls, emails or texts saying that a bank or provider has changed their bank account details and want you to make payments into a new account. Always check with the bank or provider using a verified contact method, as this is almost always a pension scam.

Remember – once you’ve transferred your money into a pension scam, it’s too late. You could lose all your pension money and be liable for a large tax bill.

Take positive action

Taking positive action could help safeguard your pension pot. We have listed some helpful resources below:

  • If you think you have been the victim of pension fraud contact your provider immediately.
  • Call Action Fraud on 0300 123 2040 or report scams online here.
  • Check to see if anyone who contacts you is on the Financial Services Register. You can also check by calling the Financial Conduct Authority (FCA) on 0800 111 6768. If you call a person or company back, use the phone number listed on the Financial Services Register in case it is a clone company.
  • Talk to trustworthy sources. The Pensions Advisory Service is available to speak to if you have any doubts. Call them on 0300 123 1047.
  • The FCA’s ScamSmart website has a tool to help you check if an investment or pension opportunity is a scam.
  • If you would like to ask our advice on this issue, please call us on 01454 773690 and talk to one of our qualified and regulated financial advisers.

1. Pension scam losses hit record high in March, Financial Times (March 2017)