Protect yourself from pension scammers

07 April 2016

As more people access their savings flexibly since the reforms in April 2015, Retirement Line is working to raise awareness of scammers who could be seeking to cheat you out of your pension savings.

Common pension scam warning signs are missed by nearly 90 per cent of people, research by the Citizens Advice Bureau found, as they struggle to decipher millions of unsolicited offers since pension freedoms*.

After years of working hard to save up for your retirement, making sure that your plans for later life are scam proof can ensure that your financial future is better protected.

The consequences of falling victim to a pension scam can be devastating. But when armed with knowledge of how to identify the warning signs of a scam and who to trust with your money, you can ensure that the only people who deal with your pension fund are those qualified to do so.

What is a pension scam?

A pension scam is when someone tries to con you out of the money you have saved or invested for your retirement years. It will often start by someone contacting you unexpectedly about:

• accessing your pension money before you have reached 55
• an investment or other business opportunity
• how you can invest your pension money

The investment opportunities they discuss with you may sound very convincing and even appealing, but if someone contacts you out of the blue about any of the above then it is likely to be a scam.

Their aim is very simple: to get you to cash in your pension pot and transfer the money. By the time you have transferred your money and realised that something untoward has taken place, it will already be too late.

A scam could cheat you out of all your pension savings and in some cases make you liable to pay tax of up to 55 per cent or face huge additional fees.

How to tell if someone is trying to scam you

There are some straightforward warning signs to look out for that could help you identify if you are being approached by a fraudster. Be wary if an individual or company:

• Contacts you unexpectedly to discuss an investment opportunity, particularly something that you need to be quick to ‘take advantage’ of
• Suggests that you can access your pension money before 55 and that they can help you do this
• Encourages you to take out a large lump sum from your pension savings, or even your entire pension pot in one go, and to let them invest it for you
• Says words and phrases like ‘pension liberation’, ‘free advice’, ‘loan’, ‘loophole’, or ‘one-off investment’
• Offers you an investment described as ‘unique’, ‘overseas’, ‘environmentally friendly’, ‘ethical’ or in a ‘new’ industry

Protect yourself

Fraudsters will often try to rush you into a decision, offering you a limited and ‘very attractive’ investment opportunity. Never make a rush decision about your money. A trusted specialist will not pressure you into deciding anything about your pension savings.

Using a specialised broker in retirement income can provide reassurance and peace of mind. Retirement Line is the UK's largest broker specialising in annuities alone (by turnover). We do not have ties with any particular providers and the retirement income report we produce for you is completely free and without any obligation to proceed with our service.

Furthermore, brokers like Retirement Line will not handle your money, or offer to handle your money, at any point when arranging your retirement income. Instead, once we have found you the highest retirement income, we organise the transfer of your pension savings from your current pension provider directly to the new company that will be providing your income.

Check them online

We highly recommend that you only discuss your pension arrangements with a firm which is authorised by the Financial Conduct Authority (FCA). Retirement Line’s details can be found on the Financial Services Register on the FCA website: www.fca.org.uk/register/. Our registered number is 726601.

And remember, if you call the person or company back, use the phone number listed on the Financial Services Register.

Speak to us

If you are ready to start receiving your retirement income in the next few months, then speak to one of our retirement income specialists today for your free retirement income options pack. Call 0800 652 1316.

Retirement Line work on a non-advised basis. If you are at all unsure of which options suit you, you should seek regulated advice.

*Financial Times March 2016