How to stay safe and not fall for the pension scam tricks

Have you seen the latest TV ad?

From the Financial Conduct Authority, (FCA) and the Pensions Regulator about pension scams? If you haven’t, you’ll be able to watch it at the end of this article.

The ad doesn’t pull any punches and the danger is, it could put people off using financial services altogether.

Yet, the best way to stay safe and keep your pension protected is to speak with a regulated specialist. As long as you know what to look for it’s easy to avoid the pension scammers.  

Here we take a look at the five biggest tricks in the pension scam book.

How to spot the pension scam tricks  

1 PensionThe company or adviser is pretending to be real

If someone contacts you claiming to be from a financial company, there is one simple rule to follow.

Check they are authorised and regulated by the Financial Conduct Authority (FCA). You can do that in five simple steps:

Step 1

Go to the FCA register

Step 2

Type in the company or adviser’s name in the search bar (as shown in the red circle)

Step 3

You may be given a few options on the name depending on what type of company it is. For example, we have chosen Portafina Investment Management Ltd. Click on the name.

Step 4

Make sure the company is authorised, as shown in the red circle.

Step 5

Scroll further down the page and you should be able to see the company/adviser’s phone number, email, address and website address. You can then make sure this matches any information you have been given. Further down the page, as indicated by second red circle, you should see the company’s status as ‘regulated’. If the company is not regulated, this will be indicated in the same place and it’s safest to avoid them.

2 PensionThe company or adviser is using unfamiliar language

Pensions are complex and there is a shed load of jargon that comes with them. Yet, if the language used by the company or person is confusing and they don’t explain what it means or what the scheme entails, it’s likely that it’s a fraudster. A few words or phrases to look out for include:

  • Pension liberation
  • Cashback
  • One-off investment
  • Limited time offer
  • Loophole

If you hear any terms like these being used, it should set alarm bells ringing that it’s a scam.

3 PensionThe company or adviser has promised ‘guaranteed returns’

If a company or person tells you there will be a guaranteed return on an investment in a short timeframe, then this is a big signal that it’s a pension scam. The investments are normally overseas, where you have no consumer protection and typically promise you a high guaranteed rate of return. These are often false investments in luxury products, property or environmental solutions which don’t exist or are extremely high risk with low returns.¹

4 PensionThe company or adviser has said you can access your pension early

You may have been told you can access your pension even though you’re under 55. So how does that work? In short, it doesn’t, without costing you a lot of money. Only in very specific circumstances will you be able to access your pension before you’re 55, such as serious illness. If you transfer your pension with a company who promises you pension access before you are 55, you could be hit with a big tax penalty and possibly lose your entire pension pot. A company or person advertising pre-55 pension release could be trying to scam you.

5 PensionThe company or adviser is pressurising you

If you’re being pressured into making a quick decision about your pension, it’s likely to be a scam. If you rush your decision, it could have a damaging effect on your plans for the future. Pensions are complicated and looking to do something with your pension is a big decision to make, so taking your time is essential.

Don’t forget…don’t be afraid to ask questions

Never be afraid to ask the company or adviser that has contacted you as many questions you can think of. Asking questions can help you to identify if you are being scammed or not. And, if the company or adviser is legitimate, they shouldn’t mind you finding out more information about them and the product they are offering.

Examples of questions you can ask are:

  • What is your FCA registered number?
  • Can I call you back? – reputable companies will always be happy to do this, whereas scammers tend to be more reluctant to give contact details.
  • How long have you been a financial adviser/company?

Trust the specialists

So, there you have it. Now you know what to look out for when it comes to a pension scam, you’ll be able to prevent someone taking your future life savings before it’s too late.

This is why it also makes sense to speak to someone who knows what they are doing. A regulated specialist who will be able to explain your options clearly and give you the time that you need to make the right decision.

Speaking to a pension specialist that is regulated by the FCA ensures that you are protected when you use their services, giving you peace of mind.

And with your pension safeguarded, your future security will be better protected too.

To find out more about identifying scammers from legitimate financial advisers, visit our scam awareness page or click the screenshot below.

Watch the FCA and Pensions Regulator TV advert here  


Call 0800 304 7288 for a friendly chat about your pension

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Important Information

¹Common concerns, pension scams, online, Pensions Advisory Service, September 2018 

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