Tel: 0800 012 1117

Safety and scams 

Don’t be tricked out of your pension! 

Beware! Pension scams are increasing and they’re getting much harder to spot.

  • According to the Financial Conduct Authority, £2.2 million was lost to pension scams in the first five months of 2021!
  • If you’re close to retirement, or considering transferring your pension, watch out, as you’re particularly at risk.
  • But scammers will target all pensions, large and small.
  • These fraudsters can be smart, pleasant, charming and financially knowledgeable.
  • Don’t be fooled. These are hardened criminals and are out to steal your pension!
  •  Anyone can be the victim of a pension scam, no matter how financially savvy you think you are, so it’s very important that you can spot the warning signs.
  •  Once the money is gone, it’s almost impossible to get it back, so members MUST be vigilant!

Here are 10 common, tell-tale signs of a scam

  1. An unexpected enquiry from someone about your pension. This could be by phone, text, email, social media, or in person. Some fraudsters even claim to be the trusted contact of a friend, or relative. In 2019, cold calling on pensions was banned, so fraudsters are now finding other ways to approach you, but some will still call illegally.
  2.  Where you’re pressurised to make a speedy decision with time-limited offers, or are encouraged to transfer your pension quickly. Never allow yourself to be rushed.
  3.  Offers of ‘free pension reviews’, ‘one-off investments’, ‘time-limited offers’, ‘cash incentives’, 'legal loopholes', 'savings advance' or ‘government initiatives’. Be very wary.
  4. Help to access your pension before you’re 55. Known as ‘pension liberation’ or 'pension loan', it is rarely allowed legally, and you will face a huge tax bill, sometimes up to 85% of the amount taken.
  5.  When you can’t call “the adviser” back, or when the contact details you’re given, are only mobile numbers or PO Box addresses.
  6.  An unexpected pensions enquiry or approach from someone who claims to be from a recognised organisation. Legitimate organisations will never contact you out of the blue.
  7.  Strangers who know your interests and concerns. They’ve been researching you, and may try to tempt you to invest in fake schemes which match your interests – maybe renewable energy, healthcare or property - whatever it takes to get you to hand over the cash. 
  8. An offer of high rates of return on an investment, while claiming it is low risk. If it sounds too good to be true, it probably is. 
  9. An opportunity for extra cash via tax loopholes or the promise of extra tax savings.
  10. The promise of exotic-sounding investments, sometimes overseas and unregulated.

10 steps to protect yourself

  1. Always reject any unexpected calls, emails, texts or social media approaches about pensions.
  2.  Be very wary if you’re offered a free pension review by anyone.
  3.  Do your own research on anyone offering you financial advice. Check the Financial Conduct Authority (FCA) register  here, to make sure that they are FCA-authorised. You can also call the FCA on 0800 111 6768 to make sure they are authorised to give you financial advice.  
  4.  Sometimes scammers may pretend to be from a firm authorised by the FCA, so you should always use the contact details provided on the FCA Register, not the details they give you.
  5. Don’t be fooled by slick-looking brochures and websites. Check and research all the contact details and accreditations you see there. If there are none, then it’s probably a scam.
  6.  Never allow yourself to be rushed into a decision. Take your time to make all the checks you need – even if this means turning down an ‘amazing deal’.
  7.  Scammers may tell you that your current pension scheme will try to stop you transferring out, suggesting they just want to keep your money. This is not the case. If your Scheme administrators (Railpen) suspect a scam, we have a legal obligation to try to protect your funds.  See our news item on how we try to protect our members from transfer scams here.
  8.  Never take financial advice from a company that has contacted you out of the blue. Nor should you use an adviser they suggest, as this may be part of the scam. Similarly, if you’re on the phone, a scammer might suggest you ‘call someone else’ to gain your trust. But the scammer doesn’t close the line. You may think you’re on a new call speaking to a trusted adviser, when in fact you’re still speaking to a scammer.
  9. If someone has approached you claiming to be from a well-known organisation, check that their contact details match exactly.
  10.  Always get impartial information and FCA-regulated advice before you take any action with your pension.

How to get safe, financial advice

MoneyHelper

 The government-backed Money & Pensions Service (MaPS) has now launched MoneyHelper, providing free, independent and impartial information and guidance on pensions and retirement.   You can go direct to the MoneyHelper pensions and retirement section here or call their Pensions Helpline on 0800 011 3797.   MoneyHelper now merges the services which were provided by:

  • The Money Advice Service
  • The Pensions Advisory Service
  • Pension Wise.

Regulated financial advisers

If you need more advice, always use an adviser regulated by the FCA.

Liverpool Victoria (LV) is our official partner for giving financial advice to BTPFSF members. LV is regulated by the FCA and is offering its services at a discounted rate for our members. You can contact them on 0800 023 4187. But you are still free to seek independent financial advice. You can find a list of FCA regulated Independent Financial Advisers in your area at unbiased.co.uk.

Final checks before you take any action

If you’re thinking of taking action with your pension, be extra vigilant and visit the FCA’s ScamSmart  website where you can find more guidance on avoiding scams.

The Pensions Regulator has also brought out a booklet on “How to spot a scam” which you can download here from The Pensions Regulator website.