How to avoid becoming the victim of a pension scam

In April 2015, the tax rules were changed to give people greater access to their pensions. This new level of flexibility now gives you more choices when it comes to gaining access to your pension. Unfortunately, whilst these changes create new opportunities for you, they have also created new opportunities for fraudsters.

 

What to look out for

Common indicators of potential fraud to look out for include:

• Cold calls – if you have been cold-called about an “amazing” investment opportunity there is a strong possibility that it could be a scam. You should be very wary on the call and the safest thing to do if you cannot validate the caller is to hang up.
• Any suggestion out of the blue that you should transfer your whole pension funds, especially if you are offered new opportunities in a non-UK based scheme.
• Anyone claiming to have a way of enabling you to access your pension before the age of 55.
• Requests for bank detail changes and asking you to transfer money out quickly.
• Trying to persuade you to take out a large lump sum, or your whole pension pot in one go, and to let them invest it for you.

 

Protecting yourself

To help make sure your funds are safe, below are some clear simple steps you can implement to help protect you from fraudsters:

• Under no circumstance should you give out financial personal information to a cold caller.
• Don’t rush into making any big financial decisions you may regret at a later date, take your time.
• If in doubt, don’t make any decisions until you’ve taken regulated advice from an independent financial adviser (IFA). You can check whether advisers are regulated at www.fca.org.uk/register.
• Make sure to carefully consider investment opportunities that are overseas as they may fall outside the regulation of the Financial Conduct Authority (FCA).

 

More information

You can also find more information about how to avoid pension scams on both the Pension Wise and the FCA websites where they explains how to spot potential pension scams, what to do if you suspect a scam and who to contact. Just go to:

Pension Wise

FCA