How to Spot Pension Scams

A pension scam is when some someone tries to convince you to make changes to your pension arrangements, like transferring or switching funds, in a way that benefits them instead of you. It might not always be illegal, but it’s definitely not in your best interest. It may some from your IFA, wealth manager, friend or some random person online. Not all scams are the same to below are some things to watch for.

1. Cold Calls or Cold Emails. If you get a random call, email, text, or letter offering a “free pension review,” be on high alert. These are usually from marketing companies looking to introduce you to an investment which may not suit you. Pension cold-calling has been illegal in the UK since February 2019.
2. Early Access to Your Pension: If someone tells you that you can access your pension money before you turn 55, be very cautious. While it’s sometimes possible, it often comes with big tax implications and risks. Plus, your money might disappear after the transfer or end up in some shady, unregulated scheme.
3. Pressure Tactics: Scammers love to use high-pressure sales tactics to rush you into a decision. If an offer is only available for a limited time or requires immediate action, it’s probably not legit.
4. Too-Good-to-Be-True Tax Loopholes: If someone claims you can benefit from tax loopholes by transferring your pension, especially if it involves moving your money abroad and outside of FCA regulation, be very skeptical.
5. 5.Low Risk Investments with High returns. If an investment promises high returns with low risk, it’s probably too good to be true. These types of investments often pay the biggest commissions to the marketers and advisers pushing them.

6. Fake Firms: Scammers might pretend to represent legitimate companies. Always double-check that a firm is the real deal by looking them up on the FCA’s website and calling their main contact number.
7. Final Salary Pension Transfers: Transferring a final salary pension is rarely a good idea. While there are some exceptions, many of these transfers are scams or examples of mis-selling designed to earn big transfer fees for the adviser.

These are a few of sign to look out for but always do your own research when it comes to pension investing. If you feel like you need a second opinion please reach out to one of the team to discuss the offer.