Being aware of the warning signs can protect you and your finances from ruin, these include:
Many of the investments that scammers offer are unusual, high-risk investments such as forestry and parking lots which might ring alarm bells, but some could sound more appealing such as renewable energy bonds and overseas property. Regardless of the investment, all scams pose a threat.
Scammers can also be knowledgeable with credible testimonials and professional marketing materials, making it harder to identify as 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. This could mean the difference between having a retirement you have planned for for years or effectively losing all your retirement income and having to work much longer than anticipated or rely on other sources of income.
Accessing your pension early is only allowed under very special circumstances such as ill health. If you transfer and access 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 and you could end up owing HMRC money.
The average victim loses £91,000.
These 5 steps could help you avoid becoming a victim of a pension scammer:
All pension savers should speak to an independent FCA-authorised adviser before making any transfers with their pension.
The FCA is the professional body which regulates firms and individuals that provide financial advice meaning it can provide details of authorised advisors.
Due to regulation changes we now must carry out specific checks before a transfer can be made. The Government has identified common pension scam risks which, if present, may suggest you are in danger of being scammed. These are called red and amber flags. If you wish to transfer out your pension, we must assess whether any red or amber flags are present. In order to make this assessment, we may request more information. We will only ask for information that we reasonably need and will only use it for this purpose.
If there are any red flags present, we must refuse the transfer. If there are any amber flags present, the transfer will be paused until you attend a pension scams appointment with MoneyHelper. MoneyHelper offers free, impartial guidance backed by the Government on money and pension choices. The purpose of this appointment is to help you identify the risk involved with transfers, highlight the dangers of pension scams and help you consider whether you still wish to transfer.
To find out more about pension fraud and what to do if you think you have been targeted visit the Pensions Regulator's website, or visit the ScamSmart website for more information on how to protect yourself and to check pension or investment opportunities you've been offered.
The Fund will never call members to ask for their bank details. If we have any questions about bank details we would email or write to you. Similarly we do not accept bank detail changes over the phone.
If someone calls claiming to be from the Pension Fund, ask for their name, hang up and then call our helpline 01224 045 045. We will be able to confirm any genuine enquiries.
Since the introduction of auto enrolment in 2012, more of us are now paying into a workplace pension than ever before.
Billions of pounds worth of pensions are sitting unclaimed in pension pots, and many of us might not know they even exist.
As the cost of living crisis continues, many of us might be reviewing our outgoings, considering if and where we can cut back on any extra spending.
We might be able to spot trick-or-treaters at our doors this autumn, but do we know the tell-tale signs of a pension trickster?