Are you at risk of a pension scam?

Anyone can be the victim of a pension scam, no matter how financially aware they think they are. It’s important that everyone can spot the warning signs.

Your pension savings are a valuable benefit so the Financial Conduct Authority (FCA) advises that you take care and get financial advice whenever you are thinking of moving your pension.

Scammers try to persuade pension savers to transfer their entire pension savings, or to release funds from it, by making attractive sounding promises they have no intention of keeping. Scams are hard to spot and are often disguised with credible websites, testimonials and materials which make them look like the real thing. Pension scammers target people like you, and pension pots of all sizes, with the average victim losing £91,000.

Scam tactics include:

  • Contact out of the blue
  • Promises of high/guaranteed returns
  • Free pensions review
  • Access to your pension before age 55
  • Pressure to act quickly

Don’t let a scammer enjoy your retirement

To help you spot the signs and protect yourself from a scam, the Financial Conduct Authority (FCA) and the Pensions Regulator suggest following four simple steps:

If you’re contacted out of the blue about a pension opportunity, chances are it’s a scam. Pension cold calling is illegal, and you should be very wary. An offer of a free pension review from a firm you’ve not dealt with before is probably a scam.

Use the ScamSmart service at www.fca.org.uk/scamsmart to ensure your financial adviser is not on the FCA warning list, and check the FCA’s register to make sure anyone offering you advice is authorised. If they are, check they’re permitted to give specialist pension advice by calling the FCA Consumer Helpline on 0800 111 6768.

If you don’t use an FCA-authorised firm, you risk not having access to compensation schemes.

When choosing a financial adviser, look for the Pension Transfer Gold Standard.

The Pension Transfer Gold Standard
There are a number of financial advice firms who hold the ‘Pension Transfer Gold Standard’. The Gold Standard is a code of best practice voluntarily adopted by regulated financial firms and advisers offering specialist advice on pension transfers. Financial firms and advisers who adopt the Gold Standard adhere to a set of principles over and above those they are required to follow by regulation.

Take your time to make all the checks you need – even if this means turning down what seems to be an ‘amazing deal’. Make sure you understand all fees and charges payable both for your financial advice, and in the pension arrangement you are looking to transfer to.

You should seriously consider seeking financial advice before changing your pension arrangements. In some cases, for example where you are looking to transfer more than £30,000 from a defined benefit scheme, there is a legal requirement for you to obtain this advice. Make sure you have spoken to/met the adviser who will sign off your advice form.

Consider using the Pensions Advisory Service (www.pensionsadvisoryservice.org.uk) which provides free independent and impartial information and guidance.

Can you spot a pension scam?

Take the Financial Conduct Authority’s (FCA) quiz to find out.

If you suspect a scam, report it

You can report an unauthorised firm or scam to the FCA on 0800 111 6768.

If you suspect a scam, report it to Action Fraud on 0300 123 2040 or at www.actionfraud.police.uk.

Useful links

To find out more, the following websites contain a host of information:

www.thepensionsregulator.gov.uk

 www.moneyadviceservice.org.uk

 www.fca.org.uk

www.pensionwise.gov.uk