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Be alert to pension scams

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How to avoid 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.

There are pension scammers 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.

Don’t put yourself at risk, get to know the warning signs of a pension scam:

  • Being contacted out of the blue – usually by phone, email or even on social media
  • Being offered a free pension review or one-off investment opportunities with ‘guaranteed’ or higher returns
  • Being offered cash up front, cash back or a loan facility
  • Scammers use high pressure sales tactics, such as time limited offers and using couriers to send documents for signatures
  • Claiming you can access your pension pot before the age of 55* 
  • Pension scammers have professional looking websites and convincing marketing material – the content may focus on complicated investment structures that are unclear and misleading

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

And remember – we’ll 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’.

Be aware

The scammers may even tell you that the government has asked them to contact you and some of these advisers or their firms might even be regulated by the Financial Conduct Authority.

You can lose a lifetime’s worth of saving. So before signing or agreeing to anything, stop and ask yourself:

“Is this too good to be true?”

If you’re unsure, get independent financial advice.

If you have already been approached and signed a contract, call Action Fraud on 0300 123 2040, and then let your pension provider know that you may have been a victim of fraud.

*You may access your pension before 55 if you’re seriously ill. Visit MoneyHelper  for more information.

Coronavirus update

The Financial Conduct Authority has put together some helpful information on their website. It explains why you should stay calm and not rush into any financial decisions – and how to avoid pension scams. We recommend you read this before making any decisions about your pension savings.

This can be a very worrying time but hasty decisions could have a big impact on your future. Remember, you’ll receive only the current value of your pension pot. So, if you access your pension savings now, you might miss out on any increases in value in the future 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 Money Advice Service website. The Money Advice Service also has a debt advice locator tool to help you find out where you can go to get free debt advice.