Since 2015, members of pension schemes have had much more freedom of choice about how they take their pension benefits at retirement. Sadly this new freedom has attracted criminals who have developed pension scams to con people out of their hard earned pension savings.
Scams usually involve people being contacted out of the blue by phone, email, text or on-line with the offer of free pension reviews. Scammers will make false claims to gain your trust, and let you know about attractive offers to persuade you to transfer your pension pot to them.
Investment “opportunities” may include unusual, unregulated or high risk investments. These may be false, involve complicated structures where it isn’t clear where your money will end up, or involve several parties which all take a fee. These may be long-term investments so it could be several years before you realise something is wrong. The scammers may have high-pressure sales tactics with “time-limited” offers, or even send a courier to your door and wait while you sign documents.
Scams are hard to spot and are often disguised with credible websites, testimonials and materials which make them look like the real thing.
To help you spot the signs and protect yourself from a scam, the Financial Conduct Authority (FCA) and Pensions Regulator suggest following four simple steps.
Step 1 - Reject unexpected offers
If you’re contacted out of the blue about a pension opportunity, the chances are it’s a scam. Pension cold calling is illegal, and you should be very wary. An offer of a free pension review from a firm you’ve not dealt with before is probably a scam.
Step 2 - Check who you’re dealing with
Search ScamSmart and check the FCA’s register to make sure anyone offering you advice is authorised. If they are, check they’re permitted to give pension advice by calling the FCA Consumer Helpline on
0800 111 6768. If you don’t use an FCA-authorised firm, you risk not having access to compensation schemes.
Step 3 - Don’t be rushed or pressured
Take your time to make all the checks you need – even if this means turning down what seems to be an ‘amazing deal’.
Step 4 - Get impartial information or advice
You should seriously consider seeking financial advice before changing your pension arrangements. In some cases, for example where you are wanting to transfer more than £30,000 from a DB scheme, you must obtain this advice.
Consider using The Pensions Advisory Service which provides free independent and impartial information and guidance.
If you suspect a scam, report it.
You can report an unauthorised firm or scam to the FCA using the online reporting form or on 0800 111 6768.
If you suspect a scam, report it to Action Fraud on 0300 123 2040 or at www.actionfraud.police.uk.
Be ScamSmart with your pension. To find out more, visit www.fca.org.uk/scamsmart
