Watch out for these new pension scams

The City watchdog has issued advice to help protect pension savers ahead of next month’s pension reforms.


If you’re aged 55 or over you’ll soon be able to access your pension whenever you want. That’s seen as a positive development – but we all know that crooks follow the money, and this has made those approaching retirement a prime target for fraudsters.

The Financial Conduct Authority (FCA) has just introduced the next wave of its ScamSmart campaign, which aims to highlight some of the tricks fraudsters are likely to use.

Martin Wheatley, chief executive of the FCA, said: “The new pension flexibilities will offer people the freedom to make choices that suit their plans for retirement. But this is exactly the time when people need to alert to the dangers of scammers offering opportunities that are too good to be true.”

Hang up on cold callers

The ScamSmart campaign encourages you to hang up if you get cold-called about a supposed investment opportunity.

According to the site, scam callers may do one or more of the following:

make contact unexpectedly about an investment opportunity via a cold call, email, or follow-up call after you receive promotional literature out of the blue

apply pressure on you to invest in a time-limited offer (for example, by offering you a bonus or discount if you invest before a set date, or saying the opportunity is only available for a short period)

downplay the risks to your money (for example, by talking about how you will own actual assets you may sell yourself if the investment doesn’t work as expected, or using legal jargon to suggest the investment is safe)

promise tempting returns that sound too good to be true (perhaps offering much better interest rates than those available elsewhere)

call you repeatedly and stay on the phone a long time

say they are only making the offer available to you, or even ask you to not tell anyone else about the opportunity.

The FCA has a new online tool to help you check out whether any investment opportunities you are offered are legitimate.

Remember that, if an investment opportunity looks too good to be true, then it usually will be

You put in how you found out about any investment you are considering and what it involves investing in, and the site will tell you whether it’s likely to be risky or a scam.

You can also check whether a firm is regulated and legitimate.

Other help

The FCA is not alone in trying to warn us about the dangers of potential scams.

The Pensions Regulator recently introduced its ‘Scorpion’ campaign, which offers advice on how to spot a scam and what to do if you are contacted by a suspect organisation.

According to the regulator, here are some of the names fraudsters might give to pension scams:
free pension review

- one-off investment opportunity

- legal loophole

- pension loans 

- early pension release

- pension selling

- cashing in your pension

- pension liberation.

Remember that if an investment opportunity looks too good to be true, then it usually will be.

Never agree to hand over money to anyone without thoroughly checking out their credentials first.

If you’re looking for pension guidance, you should use the website,

If it’s specific independent financial advice you’re after, you can track down a qualified adviser through the IFA trade body

The Pension Regulator offers the following tips on what to do if you’re not sure whether you’re being targeted by fraudsters.

- DON’T rush into making a decision.

- Before you sign anything, call The Pension Advisory Service (TPAS) on 0300 123 1047.

- If you have already accepted an offer report it to Action Fraud on 0300 123 2040.

- Before you agree to anything, make sure the adviser is approved by the FCA.

Where to find out more

You can download the pension scams booklet from the TPAS website here.

You can find out more about the Pension Regulator’s Scorpion campaign, here.

What the election could mean for pension reforms

You might still be getting to grips with all the pensions changes happening in April, but we may not have seen the last of pension reforms this year.

A change in power at the general election in May could mean the pensions system will change yet again.

Although Labour is not expected to reverse the new pension freedoms entirely if it wins the election, it might introduce rules which would prevent you from taking your whole pension as cash.

There will also be changes to tax relief, as the party plans to scrap the additional rate 45% relief in order to cover the cost of a reduction in university tuition fees.

Those earning £150,000 or more will reportedly only qualify for 20% tax relief on their contributions under a Labour administration.

Labour will also reduce the amount you can save into pensions in any given year, so you should make the most of current allowances while they are still available.

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