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Pension scams

Pension scammers promise to convert pension funds into cash before retirement, or in some cases they may suggest people can take more than 25% of their pension pot as cash. 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 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:

  • Cold called about your pension - just hang up!
  • 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.

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. 

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