If you have saved money into a pension scheme, you may be a target for unscrupulous companies or individuals. So how can you be certain to stay clear of a scam?
It is heart breaking to hear stories of older people who have been the victim of a pension scam. Some have literally lost all of their pension savings due to one unfortunate lapse of judgment. In most cases nothing can be done and all their money is lost forever.
With this in kind, here are some tips designed to help ensure your hard-earned pension savings are not taken away from you by scammers…
1. Cold callers should be a red flag.
If you are contacted out of the blue by someone who talks about pensions, beware! Legitimate companies never do this and will only contact you in response to an enquiry you raise. Government advice is to end the call immediately and alert the Information Commissioner’s Office (ICO).
2. Watch out if you’re asked to access your pension pot before age 55.
Taking money out of your pension fund before you are 55 is rarely a good idea, apart from in a few special circumstances. (The two main ones are in the case of serious illness, and if you have a ‘protected retirement date’ in your pension plan, but these are very uncommon.) Most of the time, you will incur substantial charges and could face a hefty tax bill when taking money from your pot before 55.
3. Don’t be hurried.
Scammers often create a false sense of urgency in order to bamboozle people into handing over their money. Take your time, look into everything carefully, get independent advice, and never feel rushed to make a decision.
4. Carry out a check on any company you deal with.
Visit the Financial Conduct Authority’s Financial Services Register to check that anyone you deal with is FCA-authorised and has the suitable ‘permissions’ for activities they offer to carry out. If they are not authorised, you won’t have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme.
 If after checking the Register you feel confident in dealing with a company, contact them using the contact details listed on the Register. Many scammers pretend to be a firm on the Register, so using only the contact details on the Register will ensure you are dealing with the genuine firm.
5. Contact the government’s Pension Wise service if you need help.
This service offers ’free and impartial government guidance about your defined contribution pension options’ to anyone over 50. If you have a defined contribution (DC) scheme, such as a personal or workplace pension, contact them if you need some help to understand your options.
For more information, visit the Financial Conduct Authority’s ScamSmart website.
