There are people and organisations out there - we call them pension scammers - who don’t have your best intentions at heart. There are certain things you can do to avoid these fraudsters, who are looking to exploit you and your pension savings.
Who are pension scammers?
A pension scammer is anyone who wants to trick you out of your pension savings. They might make big promises about how much money they can make for you. But they’ll probably disappear with your cash and leave you with a tax charge you’re not expecting.
It’s illegal to ‘cold call’ about pensions, but even this won’t stop some scammers. So be alert if you get a letter, email or someone unfamiliar knocks at your door. And if someone ‘cold calls’ you about your pension, put down the phone.
How to avoid scammers
Things to look out for include:
- ‘Cold calling’ – a law came into force in early 2019 that bans cold calling about pensions.
- If you receive a call about your pension, and it’s not from an organisation you already have a pension with, just hang up the phone.
- Beware of firms that write or email offering ‘to review your pensions’ or ‘pension liberation’.
- Offers of free pension advice or a pension review that are probably too good to be true.
- If someone is rushing you into a decision. A good adviser would never do this, so the best thing to do in this situation is to walk away.
- If they’re encouraging you to take a large lump sum without explaining how this will affect the tax you pay.
- If they’re using words such as 'loophole' or 'opportunity'.
- If they keep calling and try to keep you on the phone for as long as possible.
- If they promise an offer that’s exclusive to you and tell you not to tell anyone else.
