In April 2015, the rules on private pensions changed, and people over 55 now have greater freedom in how they can access and use their pension pots. There are criminals who will try to take advantage of these options by tricking people into cashing in their pension and handing over their money for them to invest.
How do I spot a pension scam?
Fraudsters will try different ways to persuade you to part with your pension cash - from promising opportunities that are simply too good to be true, to giving you false information. They might:
- contact you out of the blue, either over the phone, text or email
- claim to know about loopholes that can help you get more than the usual 25% tax-free
- offer high returns of over 8% from overseas investments or new or creative investments
- offer a ‘loan’, ‘saving advance’ or ‘cashback’ from your pension
- suggest you put all your money in a single investment (in most circumstances, a financial adviser will suggest you spread your money across different schemes)
- send paperwork to your door by courier requiring an immediate signature.
- say they'll help you access your pension pot before the age of 55 (unless you’re seriously unwell or have a certain type of scheme, this isn’t legally possible)
- pressure you into making a decision quickly
- only have a mobile phone number and/or a PO box address as contact details
If you’re planning to take your pension early, check whether there will be any penalties. If it’s a workplace pension, you may need your employer’s agreement to do so.
Pension scams are serious. You could lose some, if not all, your pension savings, or end up with a large tax bill (there can be high charges if you withdraw your pension savings early).
How can I avoid pension scams?
If you’re considering investing your pension pot, talk to an adviser regulated by the Financial Conduct Authority (FCA).
- Find an independent financial adviser through Unbiased.co.uk
- Check the FCA's register of firms, individuals or financial services
- Check the FCA's list of unauthorised firms and individuals
- Use the FCA's Warning List tool to check the risks associated with an investment opportunity
Your pension pot
Visit the Government's Pension Wise website for more information about your pension pot options, or call 0800 138 3944 to register your interest for an appointment.
What should I do if I’m targeted by a pension scam?
If you’ve been the victim of a scam don’t be embarrassed to report it. It can happen to anyone of any age. Report the scam to the police and also contact Action Fraud. The information you give to Action Fraud can help track down the scammer. You can report the scam online or by calling 0300 123 2040.
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