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Safety and scams 

Pension scams and the coronavirus outbreak

Beware – pension scams have soared significantly, taking advantage of the widespread anxiety caused by the recent coronavirus (COVID-19) outbreak.​

If you are thinking of transferring your pension, please be extra vigilant, and visit ScamSmart where you can find specific guidance relating to COVID-19.

Transferring your pension without fully understanding the consequences is a significant risk.

Please, also speak to an independent financial adviser (IFA) who is registered with the Financial Conduct Authority. Find a list of IFAs in your area at unbiased.co.uk. 

So, how can you protect your pension?

If you get a cold call about your pension, STOP and THINK before you share any information with the person calling you!

Scammers stole nearly £5 million from private pensions in the first half of 2019 alone, and an analysis in November 2019 found that pension scam victims could lose an average of 22 years of savings in 24 hours!

Scammers are very clever and make sure they sound legitimate so someone like you thinks they are honest, credible, and have your best interests at heart. 

As you get closer to retirement, fraudsters may try to lure you into an illegal transfer. If you agree, you could lose all your pension savings and face a large tax bill on top.

Recent research suggests that the more highly educated a person is, the more likely they are to fall for a pension scam.

How will you know when something is a scam?

Here are some of the most typical words and phrases scammers use, so you can spot a fraudster when you hear one:

  • early access to your pension (before 55)
  • guaranteed return on investment
  • free pension reviews and health checks
  • pension loans or cash upfront
  • transferring pension savings

A cold call or unsolicited text or email will often contain some of the phrases listed above.

 

Defined Contribution pensions

Go through your options ​before you take your DC pension benefits, by booking a free appointment with MoneyHelper's PensionWise service at https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension or speak to an IFA (full list at unbiased.co.uk).

If you're under 55, you:

  • can't release or 'cash in'your  pension (unless you are too ill to work or have a protected pension age)
  • can transfer your pension from one regulated scheme to another

 

If you're 55 or older, you:

  • can use your pension to buy a regular income for the rest of your life (an annuity)
  • can use your pension to provide a flexible retirement income (drawdown)
  • can take your pension in cash in stages
  • can take the whole pot as cash in one go

... and think about getting professional advice first.

Get more help

To avoid losing all of your pension savings, check that your adviser is registered by the Financial Conduct Authority (FCA) and study the list of known scams. If the adviser or the company isn’t on there, or if it’s listed as being investigated, do not engage.

Don’t ever be rushed into a decision. Before you sign anything, call The Pensions Advisory Service on 0800 011 3797.

And if you think you’ve been a victim of a scam, please report it to Action Fraud by calling 0300 123 2040.