Pension scams

Your pension is a valuable asset as it is something you have invested in to give you financial security when you retire. Unfortunately however, since the pension reforms introduced in April 2015 gave over-55s the freedom to cash in their company and personal pensions, there are many unscrupulous people targeting individuals with inappropriate high risk investment scams that will seem like a great opportunity to invest in. Pension scammers know all the tricks to convince people what they are offering is a legitimate investment opportunity and to transfer their savings.

The investments are usually overseas, where you have no consumer protection, and will promise high guaranteed rates of return. More often than not these are false investments in things such as luxury products, property, storage or environmental solutions, usually which either don’t exist or are extremely high risk with low returns.

There are a number of things you can do to avoid scammers and protect your pension:

-Check the FCA Register to ensure a company or adviser is registered before agreeing to anything.

-If you are contacted out of the blue you should be very wary as reputable financial advisers and companies wouldn’t cold call individuals. No legitimate pension or investment firm will ever cold call you about releasing cash from your pension, accessing it before you are 55 or saving extra tax. If they do then alarm bells should be ringing.

-Avoid anyone who promises to get you access to your pension before you are 55.

-Anyone offering guaranteed returns should be ignored. The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.

-When you are considering transferring from a scheme you can ask the scheme you are currently with to check the new scheme’s HMRC registration to ensure it is a legitimate one.

-If you are being rushed into making a decision be cautious and do not make any immediate decisions without checking everything out thoroughly first.

The Pensions Regulator has more information about pension scams here.