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Pension Fraud

Pensions are important and often very significant assets that people rely on so that they may live comfortably in later life. However, like with any valuable asset they can be the target for illegitimate activities, scams or inappropriate and risky investments.

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  • Be wary of any approaches that come out of the blue. This can be by phone, email, text or in person.
  • Be wary of offers that promise to provide guaranteed high rates of investment return or to get you access to your pension before age 55. If it seems too good to be true, it probably is.
  • Always know who you're actually talking to. Make sure that anyone advising you about transferring your pension is registered with the Financial Conduct Authority.

See also...

 

Social Engineering
Don't be manipulated into giving away confidential information.

Spam & scam email
A few simple rules about dealing with spam and scam emails.

 

You should be aware that if you transfer your pension savings into an unregulated pension scheme or investment, or you are subject to a pension scam, you are likely to lose a significant amount, if not all of your pension savings, as well as face potential arrangement charges.  Furthermore, if you were to access your pension before the age of 55 (you can only do this in very special circumstances, such as ill health) this will be considered an ‘unauthorised payment’.  Unauthorised payments are likely to result in a tax penalty from HMRC that can be up to 55% of the value of your fund.

Pension scammers are very clever and sophisticated; they use a number of methods to get their hands on your money. But, there are a plenty of tell-tale signs that can help you to spot a scam and practices you can use to guard against them.

How to spot a scam

You should be wary if:

-   You receive unsolicited approaches over the phone, via email or text message or by a doorstep caller.

-   You receive offers about accessing your personal or company pension before you are 55 years old*

-   You receive offers of transferring your money into a single overseas investment, with guaranteed returns of 8% or higher.

-   You receive offers or mentions of ‘one-off investments’, time bound offers, upfront cash incentives, ‘free pension reviews’, ‘legal loopholes’ or 'government initiatives'.

-   You are asked to provide your phone number and home address and/or personal financial information, when you are only enquiring about the products on offer.

-   You are pressured to speed up the transfer process, through the use of a courier service or a visit from an insistent representative.

-   Member documentation is withheld from you, either with or without an explanation.

-   You are provided glossy marketing materials, but limited contact details for the adviser or company providing the offers.

*Only in rare cases - such as ill health - is it possible to access funds before age 55 from your current pension scheme in these circumstances.

Guard against pension scams

-   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 – try the internet first, but be wary of ‘flashy’ websites. Any regulated financial advisers should be registered with the Financial Conduct Authority (FCA).

-   You should ask the pension scheme that you are transferring from to check the new scheme's HMRC registration and make sure it is legitimate.

-   If you are unsure about an offer you have received or if something doesn’t sound right, contact The Pensions Advisory Service on 0300 123 1047 ( Mon – Fri 9-5) to check.

-   Never be rushed, pressured or harassed into make a decision about your pension.

-   Take your time and check before proceeding.

More Information

For more information about pension scams, you can read the Pensions Regulator’s dedicated guidance as follows:

-   If you are an individual, click here

-   If you are a business adviser, click here

-   If you are a trustee, click here

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.

-   Report it to Action Fraud, the UK’s national fraud reporting centre by calling 0300 123 20 40 or by visiting www.actionfraud.police.uk  If you are in Scotland, call Police Scotland on 101.

If you think you are a victim of a pension scam

-   Contact the pension scheme who you are transferring from immediately - they may be able to stop the transfer if it has not already gone through.

-   Report it to Action Fraud, the UK’s national fraud reporting centre by calling 0300 123 20 40 or by visiting www.actionfraud.police.uk  If you are in Scotland, call Police Scotland on 101.

-   If you fear that you may have lost some or all of your pension savings, you can talk to The Pensions Advisory Service (0300 123 1047) as you may need to think about how your retirement will be affected and how best to move forward.

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If you’ve experienced cybercrime, you can contact the charity Victim Support for free and confidential support and information.