Pension schemes continue to be an attractive target for fraudsters. Anyone can be the victim of a pension scam – no matter how financially savvy they think they are – and scammers are stealing an average of £91,000 per scam.
With scammers developing increasingly sophisticated tactics and increasingly convincing literature, it’s important to get to grips with all forms of potential fraud, so you know what to look out for. Scam calls from Amazon or HMRC may be easy to spot, but don’t be tricked when potential scammers mention pensions. These kind of scam offers can include:
- Free pension reviews. A recent YouGov poll* found that 1 in 8 people said they would trust an offer of a ‘free pension review’ from someone claiming to be a pensions adviser.
- Higher returns. Guarantees they can get you higher returns on your pension savings.
- Help accessing your pension savings before age 55. You will probably be hit with a hefty tax bill of up to 55% of the value of your savings if you access them before age 55.
- High-pressure sales tactics. Scammers may try to pressure you with ‘time limited offers’ or even send a courier to your door to wait while you sign documents.
- Unusual investments. These tend to be unregulated, high risk and may be difficult to sell if you need access to your money. Even wine, for example, is an unregulated investment.
- Complicated structures where it isn’t clear where your money will end up.
- Long-term pension investments. This means it could be several years before you realise something is wrong.
Essentially, scammers are looking to present you with an attractive opportunity that persuades you to transfer all – or part – of your pension savings to them. Scams can come in many different forms and the examples included above are just some of the latest attempts by fraudsters to make financial gains.
If in doubt, apply the SCAM test:
S: Seems too good to be true
C: Contacted out of the blue
A: Asked for personal details
M: Money is requested
If you’re not sure, as a first step you can check whether the pension opportunity you’ve been offered appears on the FCA Warning List to see if it’s a known scam.
» Check your pension opportunity