North East Scotland Pension Fund

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Pension Scams

Pension Regulator Alert:

The Pensions Regulator (tPR) has received reports of pension holders being cold-called by individuals posing as tPR staff and offering a 'free pension review' - a common warning sign of a scam. tPR never cold-calls individuals about their pensions. More information can be found on the Pension Regulator's website.

Pension Scams

Scammers are trying to get savers to part with their pension by enticing people with "Pension loans' and cash incentives alongside misleading information. These are pension scams and they are on the increase.

Pension scams involve the transfer of a member's pension savings to an arrangement that will allow them to access their funds before the age of 55. However accessing pension savings before age 55 is only possible in rare cases, such as terminal illness. This activity can be fraudulent where individuals are not informed, or are misled, as to the serious consequences of entering into one of these schemes.

What To Watch Out For

  • Cold calls, text messages, website pop-ups or someone coming to your door trying to entice you with promises of quick cash, legal loopholes and pension loans
  • Claims of accessing your pension before age 55
  • Proposing single investments and promising large returns
  • Offers of up front cash
  • Transfers of your money overseas 
  • Paperwork delivered to your door requiring immediate signature
  • Not being informed about potential tax consequences

Consequences of transferring into a scam

If you transfer into a scam, you run a real risk of losing a significant amount, if not all, of your pension savings, as well as high commission or arrangement fees.

Accessing your pension early is only allowed in very special circumstance such as ill health. If you access and transfer your pension before age 55, you will face significant tax penalties of up to 55% of the value of your pension.

This means you may end up receiving very little or none of your original investment back and you could also owe HMRC money.

Five Steps to Avoid Becoming a Victim

  • Never give out financial or personal information to a cold caller
  • Find out about the company's background through information online. Any Financial Advisers should be registered with the Financial Conduct Authority (FCA)
  • Ask for a statement showing how your pension will be paid at retirement, and question who will look after your money until then
  • Speak to an adviser that is not associated with the proposal you have received, for unbiased advice
  • Never be rushed into agreeing to a pension transfer

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