MONEY: Avoiding Pension Scams

Fraudsters will try different ways to persuade you to part with your pension cash – from promising opportunities that are simply too good to be true, to giving you false information. They might:

  • contact you out of the blue, either over the phone, text or email
  • claim to know about loopholes that can help you get more than the usual 25% tax-free
  • offer high returns of over 8% from overseas investments or new or creative investments
  • offer a ‘loan’, ‘saving advance’ or ‘cashback’ from your pension
  • suggest you put all your money in a single investment (in most circumstances, a financial adviser will suggest you spread your money across different schemes)
  • send paperwork to your door by courier requiring an immediate signature.
  • say they’ll help you access your pension pot before the age of 55 (unless you’re seriously unwell or have a certain type of scheme, this isn’t legally possible)
  • pressure you into making a decision quickly
  • only have a mobile phone number and/or a PO box address as contact details

If you’re planning to take your pension early, check whether there will be any penalties. If it’s a workplace pension, you may need your employer’s agreement to do so.

Pension scams are serious. You could lose some, if not all, your pension savings, or end up with a large tax bill (there can be high charges if you withdraw your pension savings early).

What to do next – read how to avoid pension scams and what to do if you are the victim of a scam on the Age UK website.

Advertisements