You should be aware that if you transfer your pension savings into an unregulated pension scheme or investment, or you are subject to a pension scam, you are likely to lose a significant amount, if not all of your pension savings, as well as face potential arrangement charges. Pension scammers are very clever and sophisticated; they use a number of methods to get their hands on your money. But there are a plenty of tell-tale signs that can help you to spot a scam and practices you can use to guard against them.
How to spot a scam
You should be wary if:
- You receive unsolicited approaches over the phone, via email or text message or by a doorstep caller.
- You receive offers about accessing your personal or company pension before the correct age.
- You receive offers of transferring your money into a single overseas investment, with guaranteed returns of 8% or higher.
- You receive offers or mentions of ‘one-off investments’, time bound offers, upfront cash incentives, ‘free pension reviews’, ‘legal loopholes’ or ‘government initiatives’.
- You are asked to provide your phone number and home address and/or personal financial information, when you are only enquiring about the products on offer.
- You are pressured to speed up the transfer process, through the use of a courier service or a visit from an insistent representative.
- Member documentation is withheld from you, either with or without an explanation.
- You are provided glossy marketing materials, but limited contact details for the adviser or company providing the offers.
*Only in rare cases – such as ill health – might it be possible to access funds before the normal age from your current pension scheme.
Guard against pension scams
- Never divulge financial or personal information to a cold caller, or in response to an email or text.
- Get as much information as you can about the company’s background – try the internet first, but be wary of ‘flashy’ websites.
- If you are unsure about an offer you have received or if something doesn’t sound right, seek professional advice.
- Never be rushed, pressured or harassed into make a decision about your pension.
- Take your time and check before proceeding.
If you have been cold called and suspect it was a scam
- Report it to the police
If you think you are a victim of a pension scam
- Contact the pension scheme who you are transferring from immediately – they may be able to stop the transfer if it has not already gone through.
- Report it to the police.