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It’s important to be aware that scammers aren’t always people who naturally appear to be a dodgy character. In fact, most seem to be the real deal by being financially knowledgeable, with references and credible-looking websites.
Remaining cautious when things seem legitimate can be tricky. Pension Scams often go under the radar, so to help put your mind at rest and protect your pension pot, our team have put together some tips on what to look out for.
Contacted out of the blue?
If you are contacted out of the blue about a pension opportunity or review, it may be a pension scam. Cold calling about pensions is illegal and no reputable company will use this tactic.
If you receive a call, hang up immediately. If you receive any offers via email or text, ignore them and delete them.
Who are you dealing with?
The Financial Services Register names all authorised companies with the Financial Conduct Authority. The register is open for public use and will detail the activities and services it has permission for to help make sure you’re protected if something goes wrong.
If there aren’t any contact details listed for what you’ve been given, or the firm says they’re out of date on the register, call the FCA to alert them.
Be wary of unauthorised firms appearing as clone firms. A clone firm is a copy of a genuine, authorised firm. They may use a similar-sounding name or pretend to be working for the authorised firm. For a full list of firms the FCA has published warnings about, you can search their warning list.
Alternatively, if you see a firm that is no longer authorised or revoked, it means the firm’s authorisation has been cancelled and you should avoid them.
Early pension release
You should be wary of a scheme offering to help you access your pension before you’re 55.
You can only take money from your pension when you’re 55 or over except in extenuating circumstances. Offers to access this early will not be in your best interest.
Often called ‘pension liberation’ or ‘pension loan’, scammers will claim you can borrow money from your fund. If you take up the offer, your funds will be transferred into a scheme set up by the scam.
You may be ‘loaned’ an amount (around half of your pension), with the company involved taking a fee of as much as 30%.
You could also face a tax bill of up to 55% on what you withdraw. Once you’ve paid the fees and tax, any remaining money will be invested in high-risk projects or products, or simply stolen outright.
Pension reviews
Professional pensions advice, other than that offered by the FCA or Pension Wise, also known as MoneyHelper, is not usually free.
Free pension reviews are likely to be a scam and are designed to persuade you to move money from your pension into a high-risk scheme.
Your pension is then invested in unusual investments such as overseas property, forestry, storage units, care homes, or businesses you may not be familiar with. You may be promised guaranteed returns or cash from your pension to tempt you to take these offers.
Some of these investments are not run efficiently and others are outright scams. As the investments are promoted as long-term, it could be several years before you realise something is wrong.
If you think you have been contacted by a scammer, contact your provider immediately and they may be able to stop the transfer before it is complete.
I’ve transferred my pension after being offered free advice, what can I do?
If you transferred your pension to another scheme after being offered free advice, you may have been a victim of financial fraudulent behaviour.
Whether you know you have suffered a financial loss or not, we are here to help.
Barings Law is highly experienced at claiming compensation for clients who have been mis-sold a pension transfer or have been a victim of a pension scam. We will assess your claim and fight your case against your pension provider for you on a no-win no-fee basis.
All you need to do is click the button below to be taken to our Mis-sold Pension Claim page and click ‘Start Claim Now’.
At Barings Law, your legal concerns are our top priority. Whether you need guidance on a complex legal matter or have questions about our services, our team is ready to assist you.
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