How to protect your pension from scammers

Posted by TEBI on October 20, 2020

How to protect your pension from scammers




Nearly £31 million of pension money has been lost to scammers since 2017 and there are fears that scams are on the increase as a result of the coronavirus crisis.

Scammers targeted pension savings big and small in recent years, the UK regulators say, with reported losses ranging from under £1,000 to as much as £500,000. The average victim was a man in his 50s.

The Financial Conduct Authority and The Pensions Regulator have just launched a new, football-themed campaign to remind savers of the dangers of engaging with people offering things like free reviews of pension plans or “too good to be true” pension investments.

“Markets have been volatile and are likely to remain so for a while. This can have an impact on pensions, and lead to an increase in scams,” the FCA says in its latest warning. “Scammers are continuing to target pension pots of all sizes during the coronavirus outbreak.”


Don’t be rushed

The regulator reminds people that while an offer to help you cash in some of your pension may be tempting at the moment, this usually isn’t possible before the age of 55, except in cases of ill health or where you have a protected retirement age that is below 55.

Putting time pressure on pension transfers continues to be a key tactic for scammers, it says. Scammers design attractive, “limited” offers to persuade you to transfer your pension funds to them, often with deadlines to pressure you into releasing your money. But there is no transfer deadline for pensions, and this is a sign the person you’re talking to doesn’t have your best interests at heart.

The regulators say consumers also risk an “own goal” by not knowing their pension balance. They fear the true number of victims is likely to be much higher than officially reported because some savers don’t spot the effects of a scam early enough as they don’t know how much is in their pension fund.

New research — and here’s the football link — shows this lack of visibility is particularly true for football fans approaching retirement. Just 43 per cent of fans who took part in the study knew how much was in their pension fund, while 76% could tell you the cost of a football shirt.

Nearly two-thirds were confident they’d be able to spot a scammer, but the study showed 40 per cent would put themselves at risk by engaging with a common scam tactic such as being offered a guaranteed high return.


Check their stats

That’s why the regulators have teamed up with legendary football commentator Clive Tyldesley (who’s 65) to get some messages across.

“Your favourite team wouldn’t buy a new striker just because his agent says he’s good,” Tyldesley says as part of the new campaign. “They’d ask around, check out his stats, do some research – just like you should when handling your pension plans.

“Remember to take your time, seek advice, and speak to an FCA authorised adviser. Don’t agree to anything you’re unsure of,” Tyldesley says.

The FCA says you you should get advice from an FCA authorised adviser before making any changes to your pension. You can check the status of any firm that contacts you by visiting the FCA register.

Charles Counsell, the Chief Executive of the Pensions Regulator, says: “Scammers wreck lives and no matter how big or small your savings are, every pot is a target. It may seem tempting to make a change to your pension fund now, but it’s important not to rush. Before making any decision about your pension, take your time, and visit the ScamSmart website to always check who you are dealing with.”

The regulators recommend four simple steps to protect yourself from pension scammers:

— Don’t be rushed or pressured into making any decision about your pension

— Reject unexpected pension offers whether made online, on social media or over the phone

— Check who you’re dealing with before changing your pension arrangements – check the Financial Services Register or call the FCA helpline on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA

— Consider getting impartial information and advice


LESLEY GREGORY is an experienced personal finance and consumer journalist. She regular writes for TEBI money and personal finance issues that aren’t directly related to investing.
Also by Lesley Gregory:

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The one asset you need to protect

How to protect your credit score from COVID

The hidden costs of online shopping

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