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Pension fraudsters promise to convert pension benefits into cash before age 55
Criminals are believed to be fraudulently exploiting the pension liberation process in a number of ways. These include failing to advise members of the tax implications of receiving cash from their pension; failing to advise members of the full extent of fees to be paid in relation to any onward investment; falsely representing anticipated levels of returns when investments are either non – existent or incapable of providing such a return.
- The industry estimates that the current loss to the UK from this fraud type is £600 million.
- The scammers have a variety of tricks to catch you out. They may:
- claim that you can access your pension pot before age 55
- approach you out of the blue over the phone, via text message or in person door-to-door
- entice you with upfront cash
- offer a free ‘pension review’ or try to lure you in with so-called ‘one-off’ investment opportunities.
Check the facts before you make an irreversible decision. A lifetime’s savings can be lost in a moment.
The Pensions Regulator’s five steps to avoid becoming a victim of a pension scam:
- Never give out financial or personal information to a cold caller
- Check the credentials of the company and any advisers – who should be registered with the Financial Conduct Authority
- Ask for a statement showing how your pension will be paid at retirement, and question who will look after your money until then
- Speak to an adviser that is not associated with the deal you’ve been offered, for unbiased advice
- Never be rushed into agreeing to a pension transfer.
The Pensions Regulator has produced some resources for you to download to help prevent you becoming a victim.
- Individuals - For pension scheme members – how to spot a scam and protect yourself.
- Trustees - How pension scam models are changing and resources you can use when communicating to members.
- Business advisers - How pension scam models are changing and resources to help you to protect your members.
For more information about pension scams visit The Pensions Regulator website.
Before you sign anything, call The Pensions Advisory Service on 0300 123 1047
The HM Revenue & Customs website highlights the tax consequences of pension liberation to individuals.
If you have been a victim of this type of fraud, report it to Action Fraud by calling us on 0300 123 2040 or by using our online reporting tool.