Pension scams
The number of people being scammed out of their retirement savings is growing. Many people have been targeted by pension scams, which offer seemingly attractive ‘investment opportunities’ to encourage you to transfer your retirement savings into their funds. These scams could result in the loss of all of your retirement savings and you could also face significant tax penalties.
There are a few common warning signs to look out for so you can keep your retirement savings safe.
- Cold calls – unexpected pension offers whether made online, on social media or over the phone are nearly always scams. These types of calls have now been banned, so if you do get one, hang up, don’t reply to emails or texts, and don’t follow links.
- Unregulated advisers – always check the ScamSmart website www.fca.org.uk/scamsmart or call 0800 111 6768 to see if the firm you are dealing with is authorised by the Financial Conduct Authority (FCA) to give advice on pensions.
- High pressure sales tactics – such as promises of higher, guaranteed, or better returns on your retirement savings or limited time offers or pressure to act quickly. You should never be rushed or feel pressured into making any decision about your pension.
- Unusual or complicated investments – these tend to be unregulated and high risk, so it is not clear where your money will end up. Additionally, these may involve several groups or companies (some possibly overseas) which all take a fee, meaning the amount they will take from your retirement savings will be significant.
In a new twist, some scammers are now operating as so-called ‘claims management companies’ – they may claim you’ve been mis-sold a pension and use subject access requests to get their hands on your personal data. Please be very careful if you’re approached in this context.
To help you identify a scam and protect your retirement savings, the Financial Conduct Authority has launched an online tool so you can check that the firm you are dealing with is regulated and see if what you’re being offered is a known scam or has signs of a scam. Visit www.fca.org.uk/scamsmart
Other useful websites where you can find out more information and details of what to look out for are:
www.moneyhelper.org.uk
www.fca.org.uk/scamsmart/how-avoid-pension-scams
www.fca.org.uk/consumers/pension-transfer-defined-benefit
Avoid or report pension scams | The Pensions Regulator
Do not sign up for anything that you do not understand. If you have any doubts, you should contact Money Helper on 0800 011 3797 or via the website address above.