From changes made in April 2015, pension scheme members can now access their pension savings in new ways and scammers are targeting savers with promises of one-off investments, pension loans or upfront cash. Most of these are bogus.
Pension scam models are also changing. Many scammers are directing members to transfer into single member occupational schemes in an attempt to escape scrutiny. If the member is under age 55, they cannot release their pension unless they are in ill health. If members are over 55, they can now release funds from their pension and they may be at risk from scammers.
Trustees and administrators should make sure they signpost their members to the Government’s Pension Wise service to understand their options. For more information, visit the Government’s Pension Wise website.
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 or someone coming to their door offering them a ‘free pension review’, ‘one-off investment opportunity’ or ‘legal loophole’.
- Convincing marketing materials that promise someone returns of over 8% on their investment.
- Paperwork delivered to their door by courier that requires immediate signature.
- A proposal to put their money in a single investment. In most circumstances, financial advisers will suggest diversification of assets.
- They may claim that they can access your pension before age 55.
- Transfers of their money overseas.
For further information, please see the Pension Scheme Action Pack that has been produced by The Pensions Regulator in partnership with other agencies.