Avoiding Pension Scams

There is a notable rise in financial scams year on year and pensions are not immune from criminals. You have likely seen the advertisement on TV of the happy jet-skiing man enjoying the hard-earned pension benefits of another.

Part of avoiding a scam is being able to spot when something is not right and acting swiftly. The Financial Conduct Authority has released guidance on keeping your pension safe. Here we summarise the key points to note.

Notice the warning signs

Avoiding scams begins with recognising the warning signs. Some offers should send you into red alert, including:

• Free pension reviews
• An offer of higher returns on your current pension
• An offer to release cash from your pension even though you haven’t reached your 55^th birthday
• High-pressure sales tactics, putting a time limit on the offer and using a courier service to complete the deal
• Complicated structures, so you can’t work out where the money ends up
• Arrangements involving lots of different parties

There are also software packages that a scammer may ask you to download. These packages will allow the scammer to access your device and potentially gain access to your bank accounts and payment cards. These remote access scams have become more prevalent during COVID-19 when financial hardship increases the temptation to take up incredible offers.

How should you protect yourself?

There are four steps you can take to protect yourself.

First, reject the offer of unexpected pension reviews. If you receive a cold call offering any pension services, report this call to the Information Commissioner’s Office. Unsolicited offers are rarely to be trusted, and any financial service you receive is best initiated by you.

Second, check out who you are working with. Before using any financial service, even the ones you approach, find out if they are FCA approved.

Third, don’t be rushed. Anybody who wants you to make a quick financial decision is unlikely to have the best motivations.

Finally, seek independent advice before making your choice.

Keeping control

It is easy to feel vulnerable when there are all sorts of clever scammers working on getting your money. But you are in control. You will protect yourself from those with criminal intentions by taking precautions, checking people out, going slow, and seeking independent advice.

The content in this article was correct on August 16^th 2021. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on pensions for teachers and non-teachers. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.