Pension scams claim more victims

A rising tide of pension scams is an unwelcome consequence of the ‘pension freedoms’ introduced in 2015. Because people can now get access to their whole pension fund if they wish once they reach age 55, it is worth fraudsters’ while to try and persuade them to transfer this money to dodgy investment schemes. Such frauds, where victims have lost all the money they had in their pension fund, are reported in the Press almost every week. Mostly, they involve investment in schemes or companies that transfer your money to the fraudsters.

A rising tide of pension scams is an unwelcome consequence of the ‘pension freedoms’ introduced in 2015. Because people can now get access to their whole pension fund if they wish once they reach age 55, it is worth fraudsters’ while to try and persuade them to transfer this money to dodgy investment schemes. Such frauds, where victims have lost all the money they had in their pension fund, are reported in the Press almost every week. Mostly, they involve investment in schemes or companies that transfer your money to the fraudsters.

The industry regulator, the Financial Conduct Authority (FCA), regularly warms against these scams and has published a leaflet on how to avoid them (fca.org.uk/publication/publications/protect-your-pension-pot.pdf).

The key points are these:

It is against the law to cold-call people with offers of investments or pension advice. It’s best just to put down the phone on anyone who calls you like this.

In the UK, only firms authorised and regulated by the FCA may offer investment and pension advice. So always check if a firm is regulated – it’s easy to do this on the FCA’s register (https://register.fca.org.uk). Don’t deal with firms that aren’t authorised.

Firms that are authorised by the FCA carry professional indemnity insurance to protect clients. On top of this, consumers who obtain advice from authorised firms are protected by the Financial Services Compensation Scheme and usually get full reimbursement for losses and frauds.

If something looks too good to be true – like a ‘guaranteed’ return of 10% on your investment – it almost certainly is too good to be true.

Unlike the fraudsters, we do not offer ‘free’ advice. We charge fees based on the complexity of the work we do (http://www.fivewaysfp.co.uk/fee-bands). But we do offer a no-charge initial review where we can outline the key issues you need to consider.