Protect your pension from scams

 

One of the biggest risks to your pension is scams. Scammers will often claim to be legitimate pensions advisers offering you access to better pension arrangements or more lucrative investments, but their aim is to steal your money. If this happens you will not only have lost your savings, but because they will no longer be in an HMRC-registered pension arrangement, you could also face a large tax bill for taking them before you are legally allowed.

The Financial Conduct Authority (FCA) have worked with YouGov to survey more than 1,000 pension holders aged between 45 and 65 on how they feel about changing their pension arrangements. Three points that came out were:

 

If you think you may be the victim of a scam, contact Action Fraud on 0300 123 2040 (Monday to Friday 8am - 8pm), or +44 300 123 2040 if you are calling from overseas.

Three warning signs of a scam

It’s illegal to contact someone out of the blue about their pension. If you receive an email, phone call or text about your pension, be suspicious. If they are claiming to be from the administrator or someone else you are used to dealing with, we recommend that you hang up and call the organisation back on a number you already have to check the contact is legitimate.

Some phrases that scammers often use are:

  • free pension review
  • pension liberation
  • early pension release
  • pension loan

…then it probably is. Common scam claims are that they can help you access your pension savings early, or invest your money in funds with very high returns. For example:

"… we can use this loophole to help you release your pension early…"

"…our investments have guaranteed high-returns…"

"…we can help you with a pension loan if you need cash before retirement…"

Scammers will often tell you they are offering you a exclusive time-sensitive deal to try and get you to rush into a decision. Remember, the choices you make with your pension affect your future, so take all the time you need.

If you're planning to transfer your pension, we suggest:

Your transfer checklist

Scammers invest in professional looking literature and websites, but don't let the marketing speak for itself. Do your own checks, for example checking the company is legitimate through the FCA.

Scammers will often pretend they are IFAs, or offer to refer you to an adviser they know, possibly for free. You can check your IFA on the FCA register. It's always best to find your own IFA to advise you when you're making a big decision about your pension. Find an IFA on MoneyHelper.

MoneyHelper has lots of information about all your finances, including pensions, and ways to find an IFA.

The FCA’s ScamSmart site gives you the tools to check any pension or investment opportunity you’ve been offered to see if it’s a known scam. They'll also help you spot the signs of a scam.

XPS, the Scheme administrator, is always there to help if you need anything. If you've received a communication from XPS and you want to check it's not a scam, please ring or email XPS using the details on this site before taking any action.

How is the Trustee helping to protect your pension

Pension scams have become even more widespread over the last few years. The Trustee wants to help you protect your pension benefits from the threat of scams, and so has signed up to XPS Administration’s Scam Protection Service.

How the Scam Protection Service works
If you ask to transfer your benefits out of the Scheme, XPS will contact you and ask you some questions to help find out if you could be at risk of losing your money to a pension scam. This adds an extra layer of protection for you, and the Scheme pays the cost of this service.

The law now also requires the Trustee to look at two conditions:

  • Is the receiving scheme a safe place to transfer?
  • Are there any specific warning signs of a pension scam?

The Trustee is doing this with the help of the Scam Protection Service. This could delay your transfer, but if certain pension scam warning signs are identified, legally you must speak to MoneyHelper before your transfer can go ahead.