Pensions Fraud- Do you know the signs?February 10, 2017
New Pension changes, known as Freedom and Choice, became law in April 2015. This means that it is now possible for individuals aged 55 or over, with Defined Contribution Benefits, to access their pension pot as cash. Unfortunately these new freedoms have led to a rise in scammers trying to take advantage of individuals looking to invest their pension pot.
The LGPS is a Defined Benefit Scheme which means that Freedom and Choice does not apply to your LGPS pension. However, this does not mean that you will not be targeted by pension fraudsters who may encourage you to transfer your benefits out of the LGPS as part of a scam.
We would encourage you to familiarise yourself with The Pension Regulator’s ten tips below to help protect yourself against pension scams. Visit The Pension Regulator’s website for further information.
The Pension Regulator’s ten tips to help protect yourself against pension scams.
- Be wary of cold calls and unsolicited texts or emails- Scammers will often claim they’re from Pension Wise or other government-backed bodies. These organisations would never phone or text to offer a pension review.
- Check everything for yourself- People have fallen for scams because they’d been ‘recommended by a friend’. Do your homework, even if you consider yourself to be financially savvy- False confidence can lead to getting stung.
- Make sure your adviser is on the Financial Conduct Authority approved register- Pensions scammers may pose as financial advisers. Check to make sure yours is registered on the FCA website.
- Check the Financial Conduct Authorities list of known scams- Visit the FCA’s scamsmart to see if the deal you’re being offered is a known scam.
- Steer clear of overseas investment deals- Well-known scam types include unregulated investment in a hotel, vineyard or other overseas opportunities, and where your money is all in one place- and therefore more at risk.
- Don’t fall for ‘guaranteed returns’ or professional looking websites or brochures- You can never guarantee returns on an investment, and anyone can create a smart website or brochure these days. Questions everything, however credible it sounds or looks.
- Don’t be rushed into a decision- Scammers will try to persuade you with ‘time limited offers’ or send a courier to your door to wait while you sign documents. Take your time to make all the checks you need- even if this means turning down an ‘amazing deal’.
- If you’re aged 50 or over and have a Defined Contribution pension, talk to pension wise- Pension Wise is there to help you investigate your retirement options. Visit the pension wise website for more information.
- Ask The Pensions Advisory Service for help if you have doubts- You can call them on 0300 123 1047 or visit the TPAS website for free pensions advice and information.
- Contact your provider and call Action Fraud if you’ve already signed and think you’ve been scammed- If you’ve already signed something you’re now unsure about, call Action Fraud on 0300 123 2040 and contact your pension provider immediately. They may be able to stop a transfer that hasn’t taken place yet.