Pension fraud can have a devastating impact on victims as they often lose their life savings. Learn how to spot the signs of pension fraud. It could protect you and your money.
How can you protect yourself?
Here are some steps to protect yourself fraudsters trying to get your pension.
Unsolicited communication about your pension: if you get a call out of the blue (a cold call) about your pension, the safest thing to do is hang up. It’s illegal and probably a fraudster. If you get offers via email or text, you should simply ignore them.
Seek advice first: if you’re thinking about changing your pension arrangements, you should get financial advice beforehand. If you want to find an adviser, make sure they’re authorised by the Financial Conduct Authority. Never take advice from the company that contacted you, this may be part of the scam.
Investment opportunities: don’t be rushed into making an investment. Remember, legitimate organisations will never pressure you into investing on the spot.
You should treat investment opportunities with extreme caution if there’s:
- pressure to invest (eg time-limited offers);
- downplayed risk of losing your money; or
- promised returns that sound too good to be true.
Be mindful of tax implications: you’ll pay up to 55% tax on payments from your pension provider if they make an ‘unauthorised payment’. This is a payment made outside of the government’s tax rules and usually includes:
- any payments before you’re 55 (there are exceptions);
- a ‘trivial commutation’ lump sumof over £30,000; or
- regular payments into your account after you’ve died.
For more information on pensions, please visit: https://www.moneyhelper.org.uk/
What to do if you have been a victim:
Report it: if you’re worried about a potential scam, or you think you may have been contacted by a fraudster, report it to Action Fraud online at actionfraud.police.uk or by calling 0300 123 2040. In Scotland, report it to Police Scotland on 101.
If you have made a payment: inform your bank as soon as possible, they can help you prevent any further losses. Monitor your bank statements regularly for any unusual activity.