6 August 2019
Help for pension savers to avoid falling victim to a pension scam
Anyone can be the victim of a pension scam, no matter how savvy they think they are. Don’t let scammers enjoy a pension saver’s retirement at you or your employees’ expense. Find out how pension scams work, the warning signs and the steps you can take to help pension savers avoid being scammed.
How pension scams work
Scammers try to persuade pension savers to transfer their entire pension savings, or to release funds from it, by making attractive-sounding promises they have no intention of keeping.
The pension money is often invested in unusual, high risk investments like:
- overseas property and hotels
- renewable energy bonds
- storage units
Or it can be simply stolen outright.
Warning signs of a pension scam
Scammers often cold call people via phone, email or text – this is illegal, and a likely sign of a scam. They often advertise online and can have websites that look official or government-backed.
Other common signs of pension scams include:
- phrases like ‘free pension review’, ‘pension liberation’, 'loan’, ‘loophole’, ‘savings advance’, ‘one-off investment’, ‘cashback’
- higher returns – guarantees they can get better returns on pension savings
- help to release cash from a pension before the age of 55, with no mention of the HMRC tax bill that can arise
- high pressure sales tactics – time limited offers to get the best deal; using couriers to send documents, who wait until they’re signed
- unusual high risk investments, which tend to be overseas, unregulated, with no consumer protections
- complicated investment structures
- long-term pension investments – which often mean people who transfer in do not realise something is wrong for a number of years
How can employers raise awareness of pension scams?
Your staff look to you for support so your help can keep them away from pension scams. Scams victims lose £91,000 on average from their pension, often their life savings. Help your staff be ScamSmart and keep their retirement savings safe by:
- sharing the Pensions Regulator’s booklet on the signs of a scam (PDF, 122K) with your staff
- adapting the Pensions Regulator’s news story on pension scams (DOC, 176K) for use on your intranet
- displaying the Pensions Regulator’s ScamSmart poster (PDF, 266K) in your workplace
- posting the Pensions Regulator’s anti-scams messages (JPG, 1.96MB) on your social media
Four steps for savers to prevent pension scams
- Reject unexpected pension offers, whether in person, over the phone, online, or through social media
- Check who you’re dealing with before changing your pension arrangements – visit ScamSmart or call the Financial Conduct Authority on 0800 111 6768 to see if they’re authorised
- Don’t be rushed or pressured into making any decision about your pension
- Consider getting impartial information and advice