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Don't fall victim to pension scams

29 December 2017 ( 14 August 2019 )

If you're thinking about getting your finances in order, this could include making decisions about pension savings and where to invest them. But be wary of cold callers and guaranteed returns - there are pension scammers are out there, so it pays to be cautious and do your checks

Piggy bank wrapped in chains fastened with a padlock
How safe is your pension from the scammers? Here's what to look out for...

Pension savings are an investment in your future, your passport to a financially secure retirement. But research shows that every second, eight people in the UK are targeted by cold callers who are after their hard-earned savings. That’s an equivalent of 250 million calls per year.

According to Action Fraud, the 253 victims of pension fraud who contacted them lost a total of £23 million in 2017, an average loss of £91,000 per victim. 

And research conducted in 2019 by the Financial Conduct Authority (FCA ) and The Pensions Regulator (TPR), found more than 5 million savers were at risk of pension fraud. 

The "free pension review" 

Fraudsters are using tactics such as a offering a free pension review, warns the FCA and TPR. They have launched a joint TV advertising campaign to raise awareness of scams and tactics used by fraudsters. 

Be wary of cold callers

In January 2017, Guy Opperman, Parliamentary Under Secretary of State for Pensions and Financial Inclusion, warned people to be on their guard against pension scams.

Cold calling is the most common method used to initiate pension fraud

He said: “January is a great time to think about your pensions options and consider whether you are making the most of your savings. But I would urge consumers to be on their guard against pension cold callers. No reputable pensions firm would contact you out of the blue and suggest you transfer all your pensions savings to a better deal. So my message is clear – do your research, think carefully about the offer, and if you didn’t ask for the call, hang up the phone."



Protecting savers

In 2017, the Government also announced a number of new measures to better protect savers. These measures include a ban on all pensions cold calling, and that extends to emails and text messages too.

Also, HM Revenue and Customs rules are being tightened to stop scammers opening fraudulent pension schemes, and the Government will be taking action to help prevent the transfer of money from occupational pension schemes into fraudulent ones.  

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6 top tips to avoid pension scams

1 Hang up on cold callers

If someone calls you about your pension, put the phone down and don’t share any personal details with them. And ignore any contact made over social media or online. 

2 Do your research

If an offer promises ‘guaranteed’ returns, downplays the risks, or just seems too good to be true, it probably is.

Use the Government’s free and impartial Pension Wise service if you want guidance about your options for a Defined Contribution pension. 

3 Ask yourself 'Is it different?'

Be wary of anyone offering unusual or overseas investments that aren’t regulated by the FCA, such as overseas hotels, forestry and green energy schemes.

4 Don't make a snap decision

If someone is putting you under pressure to make a decision, hang up. They may be asking you to sign paperwork they will courier to you, or that this offer has a deadline and is about to end. 

5 Check them out with the FCA

Double check on the FCA’s Scamsmart website  to see if your offer is a known scam, and whether the person calling is a fraud. Always make sure they’re on the FCA Register or call the FCA contact centre on 0800 111 6768 to check they're authorised.

6 Call the Pensions Advisory Service

If you're doubtful,  call the Pensions Advisory Service on 0300 123 1047 or visit the Pensions Advisory Service website for free pensions guidance.

Do you think you’ve been scammed? 

Please call Action Fraud on 0300 123 2040.

For more tips to protect your retirement savings, visit The Pensions Regulator's website, Pension Scams

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The opinions expressed are those of the author and are not held by Saga unless specifically stated. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.