Pension scams: Experts reveal the red flags you should always look out for

Pension wise detail that scams in this area usually start with someone contacting a victim out of the blue. The scammer will obviously not be known by the victim and they will likely enquire about an investment or other business opportunity that has never been discussed, taking pension money before turning 55 or methods for investing pension money. As Pension Wise make clear from the get go, these will all likely be scams.


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As they detail, because of recent legislation it will actually be illegal to contact anyone out of the blue to discuss pension matters.

The first tip they provide is to hang up these type of calls immediately and alert the Information Commissioner’s Office (ICO).

Temptation is a useful tool that scammers use to target pension pots. An example provided includes investing in a new hotel being built in an exotic location.

The offers will be tricky to spot as they can appear very convincing.

There are of course legitimate investment opportunities out there but the due diligence on these must always be of the highest standards.

As Pension Wise detail, as soon as money is transferred from a pension into a scam it’s already too late.

Pension Wise detail that the following should raise red flags, regardless if they’re from an individual or supposed company:

  • An unexpected “cold call” about pension money by phone, text, personal visit or other methods
  • Any information about accessing pension pots before turning 55, especially if the person offers assistance with this
  • Encouragement to take out a large lump sum in one go for any investment purpose

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  • Any requests to transfer money or documents quickly; pension decisions should never be rushed
  • Certain buzz words such as “pension liberation”, “loophole” or “one-off investment”

These kinds of methods can be especially troubling for people with limited financial knowledge. As the pensions regulator highlights:

“Scammers can be articulate and financially knowledgeable, with credible websites, testimonials and materials that are hard to distinguish from the real thing.


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“Scammers design attractive offers to persuade you to transfer your pension pot to them or to release funds from it.

“It is then invested in unusual and high-risk investments like overseas property, renewable energy bonds, forestry, storage units, or simply stolen outright.”

Thankfully, it is relatively easy to protect oneself from these problems.

All that’s needed to start with is four simple steps:

Rejection of unexpected offers – free pension reviews and the like should always be treated with wariness

Check who the person is – If the person or company on the other end of the phone is legitimate they should be registered with the FCA. It will not be difficult to check this online

Check who the person is – If the person or company on the other end of the phone is legitimate they should be registered with the FCA. It will not be difficult to check this online

Don’t be rushed or pressured – patience is a virtue. Returns that seem too good to be true probably are and “act now” offerings should ring alarm bells

Get impartial information and advice – There are many independent organisations that can provide useful guidance. These can be in the form of the Pensions Advisory Service, Pension Wise or Financial Advisors.

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