Avoiding pension scams

Don’t become a victim of a pension scam.

Pension scams are still on the rise, and it’s more important than ever to be aware of scammers trying to con you.

To help you spot the signs and protect yourself from a scam, the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) suggest following four simple steps.

Step 1 - Reject unexpected offers

If you're contacted out of the blue about a pension opportunity, chances are it’s a scam. Pension cold calling is illegal, and you should be very wary. An offer of a free pension review from a firm you’ve not dealt with before, is probably a scam.

Step 2 - Check who you’re dealing with

Search ScamSmart and check the FCA’s register to make sure anyone offering you advice is authorised. If they are, check they’re permitted to give pension advice by calling the FCA Consumer Helpline on 0800 111 6768. If you don't use an FCA authorised firm, you won't be covered by the Financial Ombudsman Service, or the Financial Services Compensation Scheme, if things go wrong.

Step 3 - Don’t be rushed or pressured

Take your time to make all the checks you need – even if this means turning down what seems to be an ‘amazing deal’.

Step 4 - Get impartial information or advice

You should seriously consider seeking financial advice before changing your pension arrangements. In some cases, for example where you are wanting to transfer more than £30,000 from a defined benefit scheme, like the Nationwide Pension Fund, you must obtain this advice.

TPR recently announced that savers looking to transfer from a defined benefit to a defined contribution pension, during the coronavirus crisis, will be warned it’s unlikely to be in their best long-term interests.

Consider using The Pensions Advisory Service, which provides free independent and impartial information and guidance. If you suspect a scam, report it to the FCA using this online reporting form and report it to Action Fraud.

If you’re contacted out of the blue or have any concerns go to www.moneyhelper.org.uk/en/money-troubles/scams/how-to-spot-a-pension-scam for more information.