Unfortunately, Pension scams in the UK is common occurrence as it can be seen as being very profitable for pension scammers to obtain money by so-called fraud and deception.
We don’t teach the basics about personal finance and the world of investing. As speaking to people on daily basis about how they access their pensions from age 55.
It appears to be a very complex and confusing subject, as the vast majority of people save into a pension scheme. But they don’t know how they products work a they are never taught. So they think it’s complicated and then seek out 3rd parties to assist them.
According to a report by Action Fraud in 2023, it was reported that £ 17.7 million was lost in pension fraud. It involved 559 cases with an average loss being £ 46,969 per person.
So what is a pension scam !
A scam can appear in many different guises or formats, either way they could result in somebody lose some of all of their lifetime pension savings in an instant.
They could use so-called tricks and enticing tactics to lure you into using their products. With the possibility of securing greater return on your investments. Much cheaper pension products, or even the idea of simplifying and consolidating your numerous pensions together for ease of admin. Are you able to look after and manage numerous pensions quite easily, or has it become time-consuming, burdening to keep track of numerous personal or personal pensions.
In the past people has jobs for life and stayed with the same employer for many years.
Now people moved jobs on a much more regular basis, every few yers to better themselves or through restructuring.
Plus thanks to the introduction of compulsory workplace DC pensions through Auto Enrolment. All of a sudden an individual may end up with several numerous small pots with previous employers all with different pension providers.
So be aware of the following scare tactics:
-
- An out of the blue approach by phone, text, e-mail or other forms of social media
-
- Adverts that can appear to be enticing offering free pension reviews
-
- An investment opportunity that seems too good to be true.
-
- An cash incentive or initiative to act quickly
How can you spot a pension scam !
So how can you spot a scam, to protect you. Lets look at some common tell signs.
-
- A company will call you out of the blue, but on contacting them they are always unable to be contactable, or you are being passed around numerous people.
-
- When you are supposedly forced to act within a very short timeframe, where you are put under pressure to act quickly.
-
- An unsolicited phone call or text message. These types of calls have been banned since 2019 and was introduced by law passed by the government to protect people.
-
- They may have glossy brochures, or presentable websites with fake reviews and testimonies from other clients that don’t exist.
-
- The address may not exist or could be a simple PO Box address or reference.
-
- Or you can access your pot before age 55 (current MPA – minimum pension age). At present you can only access a pension below age 55, if you have a protected age or severe ill-health. At these rules are set by the respective pension provider, so you have to meet their criteria.
-
- You can access a pension to avoid paying tax, as some kind of loophole.
-
- A one-off investment that sound too goof to be true, promising fake investment returns. (investments will always go up and down by nature) if it sounds too good to be true it probably is.
-
- They could claim to be an organisation that has found a missing pension on your behalf. It does happen as people lose track from old pensions. But you should be the one tat contacts a pension provider, if someone contacts you out of the blue, the alarm bells should be ringing.
What ways can you avoid being a victim of a scam !
There are some simple steps that you can take to avoid such pitfalls or financial ruin.
-
- Avoid any 3rd party contact with unsolicited calls, e-mails, texts etc.
-
- Do some background checks on the company contacting you, are they authorised and regulated by the FCA. Are they authorised to offer specific pension advice. You can check the FCA register of any financial company listed and regulated. http://www.fca.org.uk
-
- Are they authorised to deal in pensions, all comment have to HMRC registered, so do some background checks on any company that you are dealing with.
-
- Are their address details correct, do the telephone and contact details they provide match and tally to their website or organisation. Does their paperwork look official, or are the details appearing poor quality or fake.
-
- Does the company have a decent reputation, look into their reviews from other clients. What about reviews and testimonies on websites, are there are any complaints made about them.
-
- If you are considering getting some free and impartial advice to help you, use Pension Wise (a free and impartial service offered by the Money & Pensions Service) use the link being: http://www.moneyhelper.org.uk/en/pensions-and-retirement.pension-wise
-
- If you considering using a financial adviser to help, do a beauty parade in your local area. What is known as shopping around, do your background checks, go to their office and deal with them directly.
-
- Check any so-called information against the FCA website on http://www.fca.org.uk/scamsmart
So what do you do it you have been targeted !
If you are concerned, act quickly but in a measured and controlled manner. Your first port of call should be your pension provider. To put a immediate stop of any transfer taking place or being initiated.
You can report it to Action Fraud on 0300 123 2040, or you can go directly to their website being: https://www.actionfraud.police.uk/
if you are based in Scotland, you can go through the police directly on 101, or an organisation called Advice Direct Scotland on 0808 800 9060.
You can call the financial crimes and scams unit on the Moneyhelp.org.uk website on the following number being 0800 015 4402.
You can even report an individual to the Information Commission office onhttps://ico.org.uk/
You could report a IFA directly to the FCA on their website, you could contact local sources such as a solicitor or Citizens Advice to assist you.
Or you could report a company to the pensions regulator on https://www.thepensionsregulator.gov.uk/
Key takeaways:
Hopefully by being vigilant and staying informed you can avoid the unfortunate event of losing any suspected pensions that you may have.
Nobody should care more about your money, savings and investments that you. Not an IFA, 3rd party or other financial organisation. But most people seem to have inertia when it comes to looking after their savings and investments. As we don’t teach people how savings and financial products work so the subject appears to be daunting, confusing and complicated.
It does surprise me the number of people that I speak to on a daily basis about accessing their pensions, how they have neglected them over the years. The statements go in a draw and they say that miles away or many years in the future and all of a sudden a selection retirement date appears on the horizon. So don’t feel under any pressure when you are trying to find a pension or start accessing or drawing it.
Access the pot for a reason, use the free advice services on offer such as Pension Wise, contact an IFA if you require. Speak to your pension provider at the time of accessing.
But remember above all, you contact them to initiate – if anyone contacts you avoid at all costs, the alarm bells should be ringing. You worked long and hard enough for your money to give you a better income or lifestyle in retirement so look after it and get involved with it. Nobody should care more about it that YOU !
Remember:
If you like this blog post, check out my other posts on https://moneyminted.co.uk, which covers savings, investments, pensions and investment books that I recommend. So you can improve you investing knowledge, financial education. so you can reach your financial goals in future.
Be the first to reply