How to spot a pension scam
There are some common tell-tale signs that mean it could be a scam:
- Unsolicited approaches by phone, text message, email or in person. Since January 2019, there has been a ban on cold calling about pensions. This means you should not be contacted by any company about your pension, unless you’ve asked them to contact you.
- When a firm doesn’t allow you to call them back.
- Where you’re forced to make a quick decision, are pressured into doing so, or are encouraged to transfer your pension quickly and send documents by courier or get a personal representative rushing you. Never be rushed into a decision.
- Where contact details you’re given, or on their website, are only mobile phone numbers or a PO box address.
- When they claim they can help you or a relative unlock a pension before the age of 55, sometimes known as ‘pension liberation’ or ‘pension loans’. Only in very rare cases, such as very poor health, is this possible.
- When they claim to know of tax loopholes or promise extra tax savings.
- Offer high rates of return on your investment but claim it’s low risk. Investments can go up as well as down, so if it sounds too good to be true it probably is.
- Offers or mentions of ‘one-off investments’, ‘time-limited offers’, ‘upfront cash incentives’, ‘free pension reviews’, ‘legal loopholes’ or ‘government initiatives.
- Claiming to be from legitimate organisations – legitimate organisations will never contact you without your permission first.
- There might be little or nothing in the way of contact names, addresses or phone numbers, but there might also be lots of people or firms involved. The more people involved, the more likely it’s not legitimate.
To help you check if an investment or pension opportunity is a scam, use the tool on the FCA’s ScamSmart website
Taking money out of your pension early can result in tax charges of more than half the value of the money you take out.
This is on top of charges of typically 20 per cent to 30 per cent for agreeing to these arrangements. Your remaining pension savings will also be placed into high-risk investments.
Investing your entire pension into one single investment could be very high risk, as investments go down as well as up.
In fact, in the worst-case scenario, you could lose all of your money.
If you’re not comfortable with the level of risk being suggested, it’s important to think carefully about whether it’s right for you.
If you want help with your immediate needs and help to see if you may be able to get your money back, you can call financial crimes and scams unit on 0800 015 4402
You can check a firm's legitimacy on the FCA register: https://register.fca.org.uk/s/
Also, you can be proactive with your pension planning, so that you know your position and you have made a plan. If you are approached by scammers you are confident in what you have, and you are happy with where your pensions are. You are less likely to want to take rushed action if contacted by a scammer.
We are always happy to discuss pensions with you: https://www.tpfinancialsolutions.co.uk/
