Be on the lookout for pension reform scams

March 25th 2015

The new pension reforms coming into force on April 6th will give you – if you are aged over 55 – freedom to cash in your company and/or personal pension pots, giving you unprecedented access to your lifetime savings. However, this is sparking a feeding frenzy among crooks and con men with one in ten (10%) over 55s surveyed having already been targeted by a pension scam as a direct result of the April changes. 

For Get Safe Online's information and advice on protecting yourself from pension fraud, click here.

With pension reforms on the horizon, a survey of over 2,000 UK adults aged over 55 commissioned by Get Safe Online, has found that only four in four (38%) people able to unlock their pension know how to spot a pension scam from an approach by a legitimate organisation. In addition, over three quarters (78%) of those surveyed aren’t worried about falling victim to a pension scam, highlighting a blasé approach to identifying the fraudulent schemes out there.

Pension fraud has always existed, with scammers bombarding potential victims through unsolicited phone calls, emails and texts, and duping innocent people into cashing in their pensions early, charging advance fees, and offering advance loans or cashback. However, the new pension rules will serve to increase the incidence of such scams, especially given the freedom to release all funds in one go. We at Get Safe Online are urging people to get smart on pension scams and the possible stings the new reforms will bring.

New data from Cifas, the UK’s fraud prevention service, also reveals that people aged over 55 are increasingly being targeted by identity fraudsters. In 2014, 25,346 people aged over 55 had their identities stolen and impersonated by fraudsters, a 15 per cent rise on the previous year (22,004). The same data that is used to impersonate people can be sold and used to make pensions scams ever more convincing and effective, highlighting the importance for over 55s to remain particularly vigilant to identity fraud at this time.

Tony Neate, CEO of Get Safe Online comments: “With these changes, pension scams could become as big as Payment Protection Insurance (PPI) scams. Victims could be liable for heavy tax charges or, in the worst case scenario, they could lose their entire retirement pot and face an immensely difficult future. In all walks of life there’s someone ready to give advice, particularly when it comes to big life decisions like what to do with your pension. But unfortunately some of the advice out there doesn’t have everyone’s best interests at heart. The new reforms will undoubtedly heighten the risk of being approached by people who aren’t who they say they are, looking to steal money from pensioners and consequently, their trust in a system which is designed to protect them."

Neate continues: “These types of criminals are clever, manipulative and will target their victims at a time when they are making big decisions about their future, whether that’s through unsolicited phone calls, emails, texts or even face-to-face conversations on the doorstep – they will try every way possible. Luckily, there are plenty of warning signs out there that can help over 55s keep their hard-earned money safe.”

Simon Dukes, Cifas Chief Executive, says: "Fraud adapts and changes – as a society we need to ensure we protect ourselves and keep up with the threats. Our data shows that increasing numbers of people aged over 55 have been victims of identity fraud, which in turn puts them at a greater risk of falling victim to scams as their details are out there to be sold or used to trick them. In the run up to pension reforms, we need to redouble our efforts to make people know how to protect their identity and can feel confident with their savings."

Look for the warning signs:

  • You receive unsolicited approaches over the phone, via email or text message or by a doorstep caller
  • You receive unsolicited approaches about accessing your personal or company pension before you are 55 years old*
  • You receive unsolicited approaches about investing the money released from your pension pot under the new rules
  • You receive approaches claiming to be from the government offering retirement planning advice
  • You are asked to provide your phone number, home address and/or personal financial information, when you are only enquiring about the products on offer
  • You encounter pushy advisers or ‘introducers’ who offer upfront cash incentives or suggest legal loopholes
  • You encounter companies that offer a ‘loan’, ‘savings advance’ or ‘cash back’ from your pension
  • You are encouraged to speed up the transfer process, including the ‘provider’ using an express courier service for documents
  • You are not informed about the possible tax consequences
  • Documentation is withheld from you, either with or without an explanation

*Only in rare cases – such as terminal illness – is it possible to access funds before age 55 from your current pension scheme.

Guard against pension fraud

  • Start by talking to a free service such as The Pensions Advisory Service
  • Never divulge financial or personal information to a cold caller, or in response to an email or text
  • Get as much information as you can about the company’s background including internet reviews. Any financial advisers should be registered with the Financial Conduct Authority (FCA)
  • Request a statement showing how your pension will be paid when you retire, and question who will look after your money until then
  • Gain an unbiased view from an adviser that is not associated with the proposal you have received
  • Never be rushed or harassed into agreeing to a pension transfer or investment of the cash you have released 

If you have been cold called and suspect it was a scam report it to the Financial Conduct Authority using their online investment scams reporting form or by contacting their Consumer Helpline on 0800 111 6768. If you have lost money to pension fraud report it to Action Fraud, the UK’s national fraud reporting centre by calling 0300 123 20 40 or by visiting



By Get Safe Online

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