A recent survey suggests that, as of March 2021, nearly eight million Brits have been targeted by pension scammers.

The LV= Health and Wellbeing Monitor report confirms that 14% of UK adults (7.6 million people) have received an unsolicited approach to release their pension funds. For those with assets between £100,000 and £500,000 (excluding property), the figure is even higher, at 24%.

While numbers were high last year – Action Fraud saw a 400% rise in scams in March 2020 – the same organisation confirms that reported crime has jumped again, with figures 45% higher for 2021 so far.

The Pensions Regulator, meanwhile, has confirmed that it is investigating the loss of more than £54 million of pension savings, affecting 18,000 people.

It is more important than ever to protect yourself from potential scams. Here are some signs to look out for.

1. Any unsolicited approach

The LV= Wealth and Wellbeing Monitor report looked specifically at those that had received unsolicited contact from someone other than their pension provider or financial adviser. The contact might have been via a phone call, email, or text, encouraging them to move or release money from their pension.

Pension cold calling was banned by the UK government in January 2019.

The ban hasn’t stopped fraudulent calls, but it does make them easier to spot. If you receive a call out of the blue from anyone other than your pension provider or adviser, be aware that it might be a scam.

Even if the callers claim to be from a reputable company, be prepared to hang up if you have any doubts. Alternatively, take a name and ring the company back using a number you find yourself.

If the unsolicited approach is via an email or SMS, don’t click any links as they could take you to a dummy site designed to harvest your data.

2. Any mention of “guarantees” or “pension reviews”

Phrases like “free pension review”, “pension liberation” or “loophole” should raise a red flag. As should any “guarantee” of better returns on your pension savings.

Pension reviews and guarantees could mean that a scammer is looking to divert your funds to a high-risk or overseas investment. More on which later.

Also, be aware that the minimum age for receiving your pension is currently 55 (rising to 57 in 2028). While scammers might claim to be able to “liberate” your pension or take advantage of a “loophole”, accessing your pension before the minimum age will – in most circumstances – be seen as an unauthorised payment.

An unauthorised payment could cost you up to 55% of your pension pot in HMRC charges, on top of any additional funds paid to the scammers.

3. High-risk or overseas investments

If you become involved in a pension scam, the scammers might claim to be investing your money. Any money you transfer to them could be stolen outright, but even if the opportunity is genuine, your funds are likely to be placed in unusual or high-risk investments.

These might include renewable energy bonds, forestry, parking, or storage units. Overseas investments might be in property or hotels.

Overseas investments are unlikely to be regulated in the same way as UK-based ones. They are also unlikely to be covered by the Financial Services Compensation Scheme (FSCS).

4. Time-dependent offers

Remember that an offer that seems too good to be true probably is. Scammers will not only make their investment opportunity seem attractive, but they are likely to make it time-sensitive too.

Offers that end soon or have limited availability might make you think you have to act fast to avoid missing out.

This is a technique scammers use to rush you into making a hasty decision, without thinking it through. Always make the relevant checks of any company that approaches you and speak to us before you decide if you have any doubts at all.

5. Unregulated or non-authorised firms

Before you make any important financial decisions, you need to be sure about who you are dealing with.

Check the firm that contacts you against the FCA Register to ensure they are fully regulated. You can also use the register to confirm that they are authorised to perform the specific regulated activity they are claiming to be able to provide for you.

Be sure to only use the contact details provided on the register.

If you have any concerns about a company you are dealing you can also visit their ScamSmart page for further tips.

Get in touch

Boolers are here to help. Remember that pension cold-calling is illegal, so any unsolicited approach is highly likely to be a scam. If you have any doubts, hang up, and don’t click on email or text links.

If you would like to discuss any aspect of your retirement plans, please contact us today.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.