In 2017, victims of pension scammers lost an average of £91k each.
And it’s worrying that in a recent survey, 32% of pension holders aged 45-65 said they were unsure how to verify if they were speaking to a genuine pensions adviser.
Scammers are becoming increasingly sophisticated. They can be articulate and sound highly knowledgeable. They will have designed seemingly attractive offers to try and persuade you to transfer your pension pot or release funds from it, which they will then invest in high-risk investments like overseas property, renewable energy bonds or forestry – or simply steal it directly!
As a result, the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) have launched a joint advertising campaign to highlight what to look out for.
1. Be wary if you’re contacted out of the blue
Cold calling is the most common approach employed by fraudsters. Be on your guard if you receive an unexpected offer regarding your pension. In all likelihood, it will be a scam. Be wary of an offer of a free pension review. A ban on cold calling for pensions will help with this but it is still currently under consultation.
2. Make sure you know who you’re dealing with
You can check the Financial Services Register (www.register.fca.org.uk) to make sure that anyone offering you advice or other financial services is FCA-authorised or approved. The register will confirm whether the firm is covered by the Financial Ombudsman and Financial Services Compensation scheme if things go wrong.
3. Avoid being rushed or pressured into making a decision
If something sounds too good to be true it probably is. Don’t be tempted to take any shortcuts for fear of losing out on an ‘amazing deal’. Remember, nothing in financial services is guaranteed so if you’re promised guaranteed high returns, alarm bells should start ringing, especially if they are pressurising you to act quickly. Another tell-tale sign that it’s not a legitimate offer is if they offer you access to your pension before the age of 55!
4. Get impartial information and advice
There are various reputable sources you can go to for help. The Pensions Advisory Service (TPAS) ( www.thepensionsadvisoryservice.org.uk) provides impartial information and advice. If you’re over 50 and have a defined contribution (DC) pension, Pension Wise (www.pensionwise.gov.uk) offers pre-booked appointments to talk through your retirement options. Their guidance is impartial, and they won’t recommend any products or companies or tell you how to invest your money. Alternatively please contact your Brunsdon Financial Adviser to discuss the best option to suit your personal circumstances.
If you do suspect a scam, hang up and report it to the FCA on 0800 111 6768 or to Action Fraud on 0300 123 2040 or online via their website www.actionfraud.police.uk
Please note that this information is for guidance only and does not constitute personal advice. The information provided is based on our current understanding of UK pension legislation (October 2018), which may be subject to change. Brunsdon is not responsible for the content of external web sites.