Warning - Pension Scams
Your pension is one of your most important savings and unfortunately, this attracts criminals who want to acquire your hard-earned savings. The main hazards are:
Pension Scams - where you are encouraged to transfer your pension savings to a fraudulent pension scheme or to move your pension into high-risk investments.
Pension Liberation - where you access your pension before age 55. Under normal circumstances, this is illegal and will lead to HM Revenue and Customs (HMRC) imposing a tax charge on you of at least 55% of the value of your pension pot. However, if you are suffering from ill health, it may be possible to access your pension below age 55 with your current pension provider.
Warning Signs of Scams
Watch out for the following signs that indicate that your pension benefits may be at risk:
- you have been offered a free pension review
- you have been advised to move your pension overseas
- you have been offered high investment returns
- you have been asked to transfer your pension quickly
- you have been promised cash back from a transfer and you are under age 55
- you have been cold called
Please read the leaflet "Don't let a scammer enjoy your retirement" which can be found on The Pensions Regulator website.
Transfer Warning
The LGPS is a Defined Benefit (DB) pension scheme. The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) have stated that they "believe that it will be in most people's best interests to keep their defined benefit pension". If you transfer out of a defined benefit pension, you cannot reverse it. Make sure that you understand the risks to help you make an informed decision".
The Pensions Regulator warns “Don't let a scammer enjoy your retirement”.
Scammers are targeting pension pots of all sizes - make sure you know how to spot the signs.
Scammers are targeting people like you with the average victim losing £91,000 each.
Scams are hard to spot and are often disguised with credible websites, testimonials and materials which make them look like the real thing.
To help you spot the signs and protect yourself from a scam, the Financial Conduct Authority (FCA) and The Pensions Regulator 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 are dealing with
Search the ScamSmart website 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 risk not having access to compensation schemes.
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 DB scheme, you must obtain this advice.
Consider using MoneyHelper which provides free independent and impartial information and guidance.
If you suspect a scam, report it.
You can report an unauthorised firm or scam to the FCA using the online reporting form or telephone 0800 111 6768.
If you suspect a scam, report it to Action Fraud or telephone 0300 123 2040.
Be ScamSmart with your pension.
Further checks before transferring
Before you agree to transfer your pension benefits, you should:
- ask to see the new pension scheme's HM Revenue and Customs (HMRC) registration letter
- contact The Money and Pensions Service on 0800 138 7777. They give free information and advice on workplace and personal pensions
- if you are over 55, you can contact Pension Wise on 0800 138 1585 for a free telephone consultation
- do your own research - check on the internet
If in any doubt, do not sign an agreement to transfer your pension benefits.
If you wish to transfer your pension, then see:
Transfer video
Please watch a short video explaining what you should consider before agreeing to a transfer:
Video: What to expect from a Pension Adviser
Telephone scams
The Berkshire Pension Team advise the following:
- Put the phone down on unsolicited telephone calls
- Never give personal or financial information to anyone who cold calls you on the telephone
- If you are unsure whether a caller is genuine, ring the company they claim to be from. Make sure that you find the number yourself and do not use a number provided by the caller
- Report any scams to Action Fraud online
- Help reduce unsolicited calls by registering with the Telephone Preference Service
Note: The Berkshire Pension Team never request bank details from our members over the phone. We always request this information in writing when it is appropriate to do so.