Beware Pension Scams

With more and more people joining pension schemes or taking control of their pension pots under new, more flexible, pension rules, the Pension Advisory Service (PAS) has launched a campaign to raise awareness of pension scams to ensure that people are aware of very real risks of pension fraud and the consequences of transferring their savings.

‘We know that scammers will target anyone at any time, but the period after Christmas when money is a little tight, is a prime time for people to be contacted out of the blue with unrealistic offers of fast cash’ said Michelle Cracknell, Chief Executive of the PAS. ‘It’s important that we keep highlighting to consumers the best way to protect their pensions from these opportunists and raise consumer awareness of pension scams.’
The campaign is intended to improve people’s knowledge of what a scam may look like, and also how they may be impacted in later life, should they fall victim.

‘If an investment seems too good to be true, it almost certainly is’

Pension freedoms introduced in April 2015 allow anyone over the age of 55 to take some, or all, of their pension as a lump sum, with the first 25% paid tax free creating a wealthy, and potentially vulnerable, target group for those motivated to take nefarious advantage.
HMRC estimates that £2.5 billion has been withdrawn from pension funds since April, with a study by True Potential suggesting that up to 64,000 people could have been exposed to scams yielding up to £400 million for the miscreants.
Chief Executive of The Pensions Regulator, Lesley Titcomb said: ‘This eye-catching campaign is another important tool in the fight against pension scams, and supports our on-going Scorpion campaign to help prevent pension savers become victims of unscrupulous yet sophisticated scammers determined to take advantage of recent reforms.’

Warning Signs of a Potential Pension Scam:

If an investment seems too good to be true, it almost certainly is; phrases like ‘one-off investment opportunities’, ‘free pension reviews’, ‘cash bonus’, ‘government endorsement’ should be all be treated with caution.
Approaches may be made via an unsolicited phone call, a text message, or even door-to-door; almost certainly the approach will come from someone articulate, unfailingly polite and thoroughly professional. It’s your money they’re after – you wouldn’t give it to just anyone would you? Make sure you don’t give it to them.
Often the scammers will have ‘identified’ tempting opportunities for you to invest overseas – any scheme requiring funds to be transferred overseas, particularly if there is any sense of urgency, or an imposed deadline, should raise an eyebrow.
Fraudsters claiming to have found a ‘legal loophole’ may be eyeing it from the wrong side of the law, and those promising you access to your pot before the age of 55 will almost certainly end up landing you with a most unwelcome tax bill and a considerable dent in your aspirations for a comfortable retirement.
If you are not sure about what you are being offered, you can get in touch with The Pension Advisor Service on 0300 123 1047.