With the COVID-19 pandemic continuing to disrupt our everyday lives, scammers are using the uncertain conditions to con people in all sorts of ways.
There has been a rise in pension scams, with crooks preying on people with pension savings in the context of volatile financial markets.
Anyone can be the victim of a pension scam, so it’s important that you can spot the warning signs. The end-goal of the scammer is to try to persuade you to transfer some or all your pension savings to a place where the scammer can get their hands on your cash.
If you get any unexpected correspondence such as a cold call, email, online message or text– no matter how trustworthy or official it may seem – be on your guard. Google recently reported that more than 18 million hoax emails about COVID-19 are being sent to Gmail users every day.
What you should do
Once a scammer has your money, it’s generally very difficult to get it back. So, avoiding the scam entirely is your best form of defence against these threats.
Remember, don’t be rushed or pressured into making any decisions about your pension.
Scams are hard to spot and are often disguised with credible websites, testimonials and materials which make them look like the real thing.
To help you spot the signs and protect yourself from a scam, the Financial Conduct Authority (FCA) and The Pensions Regulator suggest following four simple steps:
Step 1 - Reject unexpected offers
If you’re contacted out of the blue about a pension opportunity, chances are it’s a scam. Pension cold calling is illegal, and you should be very wary. An offer of a free pension review from a firm you’ve not dealt with before, is probably a scam.
Step 2 - Check who you’re dealing with
Search ScamSmart and check the FCA’s register to make sure anyone offering you advice is authorised. If they are, check they’re permitted to give pension advice by calling the FCA Consumer Helpline on 0800 111 6768.
If you don’t use an FCA-authorised firm, you risk not having access to compensation schemes.
Step 4 – Get impartial information or advice
You should seriously consider seeking financial advice before changing your pension arrangements. In some cases, for example where you are wanting to transfer more than £30,000 from a DB scheme (such as the Retirement Income Builder), you must obtain this advice.
Consider using The Pensions Advisory Service which provides free independent and impartial information and guidance.
If you suspect a scam, report it. You can report an unauthorised firm or scam to the FCA using the online reporting form or on 0800 111 6768.
Find out more about keeping your pension safe from any scams related to COVID-19 or otherwise on The Pensions Regulator’s dedicated page and visit ScamSmart which has specific guidance relating to COVID-19.