Pension scams are on the rise and fraudsters will do whatever it takes to get their hands on your savings.
Scammers are always in operation however challenging financial situations, such as COVID-19, could cause people to be more tempted to consider risky deals with promises of attractive and quick cash gains.
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.
To find out more about pension fraud and what to do if you think you have been targeted visit the Pensions Regulator's website.
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 264 264. We will be able to confirm any genuine enquiries.
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As 2021 draws to a close, we are taking a glimpse back at the Fund’s main achievements of this year.
The NESPF office will be closed from 4pm on Friday 24th of December until 10am on Wednesday 5th January for the Christmas break.
Talk Money Week runs from 8th-12th November and encourages us to have open and transparent conversations about personal finance.