Watch out, there’s a pension scam about!

The Pension Advisory Service (TPAS) advises that fraudulent activities are becoming more prevalent. People are being encouraged to cash in their pension fund to invest in high risk, unregulated, expensive and sometime fraudulent investments. You may not know, but these schemes do not have the protection that pension schemes have and some are completely unregulated, so if it goes wrong there is no safety net.

Here are some new scams we have heard of:

You are asked to transfer your pension into a UK-based self administered pension scheme that offers high risk and unregulated investments.

It is suggested that you transfer your pension scheme into an offshore-based pension fund recommending high risk investments. Again, this may not have the same investor protections.

You are persuaded to cash in your pension and invest in a high risk and unregulated investment.

Tips on types of scam to watch out for

Pension scammers are very clever and some fraudulent schemes will appear to be legal. Company names may include words which are used by government or other authorities like “wise”, “advisory”, “service” and some scammers may even suggest that the Government has asked them to contact you.

Here are some common features of pension scams:

1. Look out for phases like: ‘one-off investment opportunity’, ‘free pension review’, ‘legal loophole’, ‘cash bonus’, ‘government endorsement’. Be wary of these phrases, for example, government services like the Pensions Advisory Service and Pension Wise, will never make unsolicited calls or ask for personal information about you or your pension. In fact, it’s up to you to arrange an appointment with Pension Wise for advice. So if someone calls you, it is likely to be a scam. Beware of companies claiming to be backed by government – they are making false claims.

2. High-pressure sales tactics such as being approached out of the blue over the phone, via text messages or in person door-to-door. If someone calls you, always call them back. Legitimate companies will be happy for you to do this. Scammers are usually not happy to be contacted or may provide you with false information.

3. Schemes which transfer your money or investments overseas, meaning the money is harder to recover.