Guard against pension scams

Once it’s gone, it’s hard to get your money back

In the 25 years I’ve been a regulated financial planner I have come across a pension scam twice, both related to the same company.

Unfortunately, it wasn’t obvious to the couples introduced to me that they’d been scammed and, years later, they still don’t have their money back.

The scale of such scams has been revealed by The Pensions Regulator – more than £30million reported lost since 2017, according to complaints filed with Action Fraud.

And TPR believe the number of victims is likely to be much higher because savers fail to spot signs of a scam and aren’t aware of how much is in their pension pot.

Scammers targeted pensions large and small, with individual losses ranging from under £1,000 to as much as £500,000. The average victim was described as a man in his fifties – but this could happen to anyone.

It’s said football fans approaching retirement appear particularly vulnerable to scams. Research showed only 43 per cent know how much is in their pension pot and 45 per cent were clueless over how to check if an approach about it is legitimate.

If someone contacts you unexpectedly and says they can help you access your pension before the age of 55, the call is illegal and it’s likely to be a fraudster. Report them to Action Fraud on 0300 123 2040 or visit the organisation’s website.

You may be offered a tempting way to invest your pension fund, for example in a new hotel being built in an exotic location, but don’t fall for it.

Most offers are fake but can appear very convincing. Their aim is to get you to cash in your pension pot and transfer your money. Once you’ve transferred into a scam, it’s too late: you could lose all your pension, as well as face tax of up to 55 per cent or huge additional fees.

Because of the link to football fans, The Pensions Regulator and Financial Conduct Authority are working with commentator Clive Tyldesley in a campaign to try to raise awareness.

You can significantly reduce your risk by dealing with FCA-regulated firms only. This means checking the person giving you the advice and the firm they work for are both registered at register.fca.org.uk.

Ensure you check your adviser’s identity, too, as they could be masquerading as a financial expert.

The Pensions Advisory Service also has an online tool to help you know if you’ve been scammed.

We hear horror stories of people losing their life savings, but it’s also important to remember that this is a rare occurrence.

Always act on the cautious side and, if in doubt, ask a financial planner to check things over.