Pension Scams and what to look out for?
Since April 2015, the pensions landscape has changed following the introduction of what we call Pension Freedom. As a result, pension scheme members are now able to access their pension savings in new ways. This has resulted in an increase in pension scammers encouraging people to transfer their savings to them with the promise of good returns and excellent performance. Here are some of the bogus tactics they use:
- Offering free pension reviews and health checks
- Promising better return
- Offering pension loans,
- Using promotions such as up-front cash as incentives
As an initial rule of thumb, if the member of a pension scheme is under age 55, they cannot release their pension in any event, unless they are in ill health. The danger is when the member is over 55, as Pension Freedom means that they can now release funds from their pension, meaning they are at risk from scammers. This is where pension scheme members should always consult their trustees and administrators if they believe they have been approached by scammers.
The most common pension scam tactics
Here are some of the most common tactics used by pension scammers to trick savers out of their savings:
- A cold call, text message, website pop-up offering a ‘free pension review’, ‘one-off investment opportunity’ or ‘legal loophole’.
- The promise of returns of over 8% on an investment.
- Paperwork delivered to the front door by courier that needs an immediate signature.
- A proposal to put money in a single investment. Usually, financial advisers will suggest diversification of assets.
- A claim that a pension can be accessed before age 55.
- Transfers of money overseas.
There are others and new ones are coming along regularly. If you believe you have been targeted by a scammer, contact us or call us on 0121 693 0690 for a no obligation chat for the advice you really need.