Falling for pension scams

Many of us prioritise our pension savings to ensure a comfortable lifestyle in retirement. But savings can vanish in a second at the hands of unscrupulous fraudsters. Pension scams and their effects on the soon-to-be-retired are too often headline news.

The Financial Conduct Authority (FCA) believes that 5m+ people across the UK could be at risk of falling for at least one pension scam in their lifetime. This alarming statistic has led to the FCA and The Pension Regulator (TPR) working together on a project called ScamSmart, targeting fraudsters who try to access individual pension savings.

It is crucial for everyone to understand the key points from ScanSmart’s campaign which are summarised below.

Scam warning signs

Be wary of:

  • Being contacted out of the blue. 
  • Being offered guaranteed higher returns than your current rates.
  • Being promised access to your pension early (before age 55).
  • High pressure sales where terms such as ‘limited-time offer’ are used or a courier is sent to your door to wait while you sign documents.
  • Unusual investments such as unregulated and high risk which may be difficult to sell if you need access to your money in the future.
  • Complicated structures where it isn’t clear where your money is going.
  • Arrangements where there are several parties involved (some of which may be based overseas) all taking a fee, leading to a significant total amount deducted from your pension
  • Long-term pension investments, which means it could be several years before you realise something is wrong.
  • People offering to provide you with free pension reviews.

This list covers some of the common scam flags but is not exhaustive. If you’re concerned, make sure to take the steps to protect yourself and your pension.

Protecting yourself from a pension scam

The FCA recommends taking the following protective steps.

  1. Reject unexpected offers
    - As of January 2019, cold calls about pensions are banned. If you receive an unexpected call, it is likely to be a scam.
  2. Check who you’re dealing with.
    - Check the FCAs Financial Services Register to ensure that anyone offering advice is FCA authorised and permitted to advise in relation to your pension. If you take advice from an unauthorised firm, you won’t be able to make any future claims with the Financial Ombudsman Service or the Financial Services Compensation Scheme. This means you’ll be unlikely to get your money back from the scam. https://register.fca.org.uk/
    - Check the company is registered at Company’s House to ensure it is legitimate https://beta.companieshouse.gov.uk/
    - Check the FCA warning list https://www.fca.org.uk/scamsmart/warning-list
    - Make sure it is not a ‘clone firm’ pretending to be a real firm. Use the contact details on the FCA register to verify the firm. 
  3. Don’t be rushed into making a decision.
    - Take your time to assess what you’re being offered and ensure that it’s valid.
  4. Seek impartial information or advice.
    - The pension advisory service provides free independent, impartial information and guidance.
    - Speak to us. Lubbock Fine Wealth Management takes a holistic view to ensure that what you’re doing fits your personal financial circumstances and goals. We are regulated by the FCA and complete due diligence on pensions and investments we recommend to ensure against scamming.

No-one wants to sacrifice their retirement savings to unscrupulous fraudsters. Always take the time to safeguard your money.

Remember if it sounds too good to be true, then it probably is!

For further information on any of the above, please contact Andrew Tricker, Director LFWM andrewtricker@lfwm.co.uk.

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