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Protect your pension from scammers

testimonial "Hi, I’m Gloria – a Pensions Technical Manager here at Nest. I’m responsible for ensuring our offerings to members are the best they can be, whilst checking we’re compliant with the laws and governing bodies."

Gloria McDonald

Pensions Technical Manager

We’re noticing pension scams are on the rise across the UK. Over £2 million was lost to pension fraud in the first six months of 2021 alone, with the average person losing £50,949 to fraudsters.

Criminals are exploiting the 2015 pension freedom reforms giving you more choice on how and when you can access your savings, as well as the general uncertainty caused by the pandemic, to trick people out of their life savings. They’ll promise hefty profits for small risks – but leave people without their life savings and facing pension poverty.

Increasingly, they’re using digital channels and high-pressure sales tactics to convince unsuspecting pension savers to hand over their cash.

Organisations like Action Fraud, the Financial Conduct Authority (FCA) and MoneyHelper have been working hard to protect pension savers and make sure people know the warning signs of scams.

For example, cold calling someone about their pension isn’t legal and any calls like this will be a scam. You’re also highly unlikely to be able to access your pension before the age of 55 without facing a large tax bill, despite what some scammers may claim.

As people get more cyber savvy, scammers will develop ever more sophisticated ways to trick them.

Worryingly, although 68% of people claimed they could confidently spot the signs of a pension scam in a recent study, only 28% realised that being offered a free pension review was a key sign of potential fraud. Clone websites and phishing emails that hijack the branding and logo of reputable companies are just some of the fraud tactics to watch out for.

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So, what can you do to protect your pension pot with scammers getting ever smarter?

If you’re approached with an offer that sounds too good to be true, it probably is. We recommend taking these FCA-approved simple steps to protect your pot:

  1. Reject unexpected offers: Ignore unsolicited emails, calls and texts offering deals on your pension as they’re likely to be scams. Don’t take offers to review your pension for free, unless you’re using the government-backed organisation, MoneyHelper. Professional advice always comes with a price tag.
  2. Check who you’re dealing with: The FCA has a financial services register where you can check if firms contacting you are authorised to provide advice or financial services. Some scammers will attempt to mirror legitimate companies, making it harder to spot.
  3. Take your time to make a decision: Some scammers will pile on the pressure or push you for decisions with a limited time offer. The more sophisticated ones won’t necessarily use these tactics, but it’s a good sign that it’s not a legitimate offer. It’s important not to rush into decisions and to spend time checking the firm and the offer.
  4. Get impartial information or advice: If you’re thinking of making changes to your pension arrangements, the FCA recommend seeking financial guidance or advice. Independent advisors will charge for this, although MoneyHelper offers independent guidance and information, free of charge.

If you’d like to know more about pension scams, or have been approached by – or even a victim of – pension fraudsters, visit the FCA website immediately. Taking the time to report your experience could help other people from falling victim to the same scam.

Published 15 July 2022

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