pension scams

Her Majesty’s Revenue and Customs (HMRC), the Pensions Regulator and the Financial Conduct Authority (FCA) are concerned about the number of individuals who are enticed into pension scams, which are prevalent in the UK. The FCA provides information on their website explaining the dangers of these scams, how they work, how to avoid them and what to do if you suspect a scam. This information is currently available at www.fca.org.uk/scamsmart/how-avoid-pension-scams.

A pension scam is when an individual or company seek to encourage members to transfer their benefits out of a legitimate pension arrangement to their arrangement. By promising high investment returns, or access to early cash, scammers use high-pressure sales tactics to try to get people to sign up without having a chance to think a transfer over thoroughly, such as offering to courier paperwork to you that day so you sign it straight away. This often results in pension savers losing most, if not all, of their savings to scams and charges.

To try and reduce the number of people falling victim to scams, see the below list of things to watch out for when considering a transfer.

Look out for:

• Being approached out of the blue by text, email or door-to-door.
• Pushy sales people who offer upfront cash incentives such as a ‘saving advance’ or ‘cash back’ from your pension.
• Offers of high investment returns, ‘creative’ investment techniques or overseas investments.
• Not being informed about potential tax consequence.

Four steps to avoid becoming a victim:

1. Never give out financial or personal information to someone who has contacted you out of the blue.
2. Find out about the company’s background through information online. Any financial advisers should be registered with the Financial Conduct Authority (FCA). You can check this at register.fca.org.uk
3. Speak to an impartial financial adviser that isn’t connected with the proposal or company you have received a proposal from.
4. Never be rushed into agreeing to a pension transfer.

If you think you have been a victim of fraud (or you have been targeted) report it immediately.

Action Fraud will give you advice on what to do next. You can reach them on 0300 123 2040.

Find out more about Action Fraud at www.actionfraud.police.uk