Pension scammers are after your cash – and if you are approaching retirement you’re likely already had an approach from fraudsters even if you have not spotted them.
Knowledge gives you power against their carefully scripted arguments that you can earn more by shifting your savings from a reputable pension scheme into one of their scams.
Now the government’s Pensions Regulator has stepped up the campaign against pension scams by launching a new campaign aimed at giving unwitting consumers the information they need to spurn scammers.
The five ploys to watch for
The regulator says pension fraudsters try to rip off consumers in five ways:
- Offering access to pension cash to retirement savers aged less than 55 years old who are not in ill-health.
The truth is if you are under 55 and not suffering from a terminal illness, you cannot take cash from your pension without paying a tax charge of at least 55% of the value of the amount you withdraw
- Inviting retirement savers for a free pension review that includes a one-off, time limited chance to gain from investment opportunities or to borrow or withdraw cash from a pension
- Regulated financial advisers are not allowed to cold call – so if you receive an email, letter, phone call or text message from some purporting to offer pension advice, they are a scammer
Some even pose as official regulators from the Financial Conduct Authority or other government agencies. These organisations never initiate contact with consumers.
- Sales people offer guaranteed high investment returns. No one can guarantee an investment and anyone offering profits that are not available elsewhere is probably leading you on
- Shiny brochures and marketing material do not mean the offer or firm is genuine
- Beware lucrative overseas investments because once your money has left the UK, it is difficult to track and even harder to get back. Putting all your money into a single investment is also a good way to lose your savings
Warning from consumer watchdogs
“Pension scams come under a lot of different guises,” said a spokesman for the Pensions Regulator.
“If someone mentions unlocking your pension, this is not illegal but will come with fees, tax charges and other costs that considerably reduce the value of your savings.”
Read more about pension scams and how to protect your retirement savings
