Be Scam Aware
A quick search for pension scams on the internet will more often than not result in many recent articles about individuals losing devastatingly large sums of money to the hands of criminals. Every year, the number of people become victims of pension scams is increasing, with millions lost to scammers annually, some even losing life-savings.
Action Fraud recently reported that in 2023, £17.7m was lost to pension fraud, a figure that is estimated to be higher due to unreported cases. It is not known how much of that amount was recovered. What is known however, is that pension scams are on the rise.
The advances in technology make it harder to spot obvious red flags when it comes to cash cons, and in the challenging financial climate it is more important now than ever to be extra-vigilant.
Scammers often use sophisticated and manipulative tactics to lure savers in to transferring their pension pot or cash it in. These criminals will most likely seem professional and respectable, they may be persuasive and use the correct terminology along with marketing materials, client testimonials or websites that seem legitimate.
It is important to be alert and look out for vital signs that could draw your attention to a scam. Being aware of the warning signs and backing away could protect you and your finances from financial ruin, these include:
- Cold calls, text messages or contact out of the blue with promises of quick cash, legal loopholes and pension loans
- Claims of accessing your pension before age 55
- Promises of high or guaranteed returns
- Free pension reviews
- Transfers of your money overseas
- Claims that opportunities are time-limited with pressure to act immediately
- Investment opportunities in unusual sectors e.g. forestry or parking lots
Being aware of the above warning signs and following the steps below could help you avoid becoming a victim of a pension scammer:
- Never give your financial or personal information to a cold caller. If a cold caller asks for any personal or financial details – hang up immediately.
- Find out about the company's background. Any Financial Advisers should be registered with the Financial Conduct Authority (FCA).
- Ask for a statement showing how your pension will be paid at retirement, and question who will look after your money until then.
- For unbiased advice, speak to an advisor who is not associated with the proposal you have received.
- Take time to conduct your own research and never be rushed into a decision.
When it comes to scams, if the claims sound too good to be true, they often are. Before making any drastic decisions when it comes to your pension, it is important to consult with an independent FCA-authorised adviser. The FCA is the professional body which regulates firms and individuals that provide financial advice, meaning it can provide details of authorised advisors who can give you legitimate advice on savings.
To find out more about pension fraud and what to do if you think you have been targeted visit the Pensions Regulator's website, or visit the ScamSmart website for more information on how to protect yourself and to check pension or investment opportunities you've been offered.
A reminder that the Fund will never call members to ask for their bank details. If we have any questions about bank details we would email or write to you. We also do not accept bank detail changes over the phone.
If someone calls claiming to be from the Pension Fund, ask for their name, hang up and then call our helpline on 01224 045 045.
