We share our tips so you can recognise a pension pot scam — plus get a free fiver from our rewards club
NEW pension freedoms are proving very tempting – to crooks.
Since changes to the law in 2015, more than £40million has been fraudulently taken from retirement funds, according to a police report this week.
The relaxed rules mean anyone over 55 can move or access their pension pot.
MPs, forced to act by the scale of the problem, have now launched an inquiry into the effects of the freedoms.
If you are about to access your pension early, or withdraw a lump sum, how can you protect yourself from falling victim to the scammers?
Darren Philp, director of policy at The People’s Pension, says: “The pension freedoms have revolutionised the savings industry.
“But these freedoms are fraught with danger. If an offer seems too good to be true, it probably is.
“Scammers are out there and not only could people lose their money, they could also face a hefty tax bill.
“People need to take the utmost care with their savings.”
Recognising a scam
If somebody contacts you unexpectedly and says that they can help you access your pot before the age of 55, it is likely to be a scam.
Their aim is to get you to cash in your pension pot and transfer the money to them.
Fake offers often include an investment “opportunity” or other business venture, such as building a hotel in an exotic overseas location.
Watch out if a company or individual:
- Cold-calls you about your pension money by phone, text message, visiting you in person, or in other ways. Hang up on any cold-call and don’t reply to any messages;
- Says you can access your pension money before you turn 55 and can help you with this;
- Encourages you to take out a lump sum, or your whole pension pot in one go, and to let them invest it for you;
- Asks you to transfer your money quickly, even sending documents to you by courier. Never rush into a decision about your pension money;
- Uses words such as “pension liberation”, “loan”, “loophole”, “free pension review” or “one-off investment”;
- Offers you an investment they describe as being “unique”, “overseas”, “ethical”, “environmentally friendly” or in a “new” industry.
Other dangers
Beware copycat websites. Some websites can look like official governmental services, such as Pension Wise, when they are anything but.
Get wise to bank details scams. Always phone your service provider if you receive an email saying they have changed their bank details and they want you to make payments into a new account. This is almost invariably a scam.
Are they registered? Always check if the person or company contacting you is on the Financial Services Register or call the Financial Conduct Authority on 0800 111 6768. If you call the person or company back, use the phone number listed on the Financial Services Register.
Using a pension adviser? Make sure they are registered with the Financial Conduct Authority at fca.org.uk/firms/financial-services-register.
Been scammed?
- Call Action Fraud on 0300 123 2040 or go to actionfraud.police.uk
- Call the Pensions Advisory Service on 0300 123 1047
- Try the FCA’s ScamSmart website to see if the deal on offer is a known scam.Go to fca.org.uk/ scamsmart
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