Pension Scam Warnings and How to Stay Safe

Yourmoney has an article outlining seven signs to look out for to prevent pension scams and keep your savings safe.

Overview:

• Scammers frequently target pension savings, and the current cost-of-living crisis has heightened this risk.
• Factors like high inflation, rising prices, and increasing interest rates have exacerbated financial pressures on households, making them more susceptible to scams.
• Dean Butler of Standard Life comments, “Sadly, tough periods are boom times for scammers, as it’s easier to exploit people who are struggling,”
• The Pensions Regulator (TPR) has initiated a new scam-fighting strategy, warning savers of potential threats.
• Scammers aim at pensions due to the large sums and complex rules involved.
• Scam methods range from tricking individuals into transferring their pension to fake or high-risk schemes to persuading them to prematurely release their funds.
• Scammers exploit victims’ anxieties, promising lucrative returns or early access to pension funds. If one falls prey, retrieving the lost money can be extremely challenging.

Warning Signs:

1. Unexpected Contact: Pension scam approaches often come unexpectedly via emails, letters, or direct social media messages.
2. Fake Expertise: Scammers might pose as pension advisers, representatives from government agencies, or legitimate financial firms.
3. Suspicious Phrases: Beware of terms like “free pension review”, “pension liberation”, “loan”, “savings advance”, or “cashback”.
4. Too-Good-to-Be-True Offers: Scammers might promise guaranteed/high returns from odd, unregulated, or international investments lacking consumer protection.
5. High Pressure Tactics: Be cautious if you’re made to feel anxious or urged to act swiftly with phrases like “time-limited” or “one-off”.
6. Early Access Promises: Scammers might falsely claim you can access your pension before age 55.
7. Complex Investments: They might persuade victims to invest in intricate schemes requiring multiple payments.

Protection Measures:

1. Take Your Time: Never rush decisions, especially under pressure. Always research thoroughly.
2. Independently Verify: Don’t solely rely on information or sources the potential scammer provides.
3. Use FCA’s ScamSmart Website: This platform offers valuable guidance on scam prevention.
4. Consult the FCA’s Financial Services Register: Ensure the involved party is listed. If not, you won’t have protection from the Financial Services Compensation Scheme or the Financial Ombudsman Service.

Reporting:

• If you suspect a scam, report to the FCA either online or at 0800 111 6768.
• If you’ve lost money to a scam, inform Action Fraud online or at 0300 123 2040.