How to avoid the fraudster when it comes to your pension plans

Over recent times pension fraud has increased significantly with over £30m lost to fraudsters since 2017 according to Action Fraud.

It would appear this is a serious business and as regulated financial advisers, it is frustrating to hear. Particularly as there are simple steps which can be taken to ensure that you are not at the mercy of unscrupulous individuals who are not regulated and who seek to access people’s lifetime savings.

Who is at risk?

Whilst all ages can be targeted, according to YouGov research, fraudsters lean toward targeting men in their 50s who are aware that they have under saved for retirement and are keen to increase the size of their pension pot.

Scams will often start with an unsolicited approached either by call, email, text, or even social media. They offer a free pension review highlighting the potential for very attractive returns in investments such as foreign property, green energy solutions and/or hotels. These investments are generally considered high risk investments and are often not suitable for retirement funds or individuals approaching retirement where they will be reliant on their retirement savings.

Importantly, the investments offered will frequently not offer a cooling off period, will be issued with limited or no risk warnings and have no recourse to the regulator or financial ombudsmen.

Tips for avoiding scams

  • Reject unexpected pension offers whether made online, on social media or over the phone.
  • Check who you’re dealing with before changing your pension arrangements. You can check the FCA Register or call the FCA contact centre on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA.
  • Don’t be rushed or pressured into making any decision about your pension.
  • Consider getting impartial information and advice.

The government introduced a ban on firms making unsolicited calls of this type in early 2019 with firms facing fines for ignoring the rules. However, fraudsters continue to ignore the rules and are still hounding people into investing their life savings in such schemes.

There are several reasons why the public are susceptible to this type of fraud but a principle issue, is that individuals know very little about what is held within their pension. This combined with the increasing fear as you approach retirement that you may not have saved enough makes it easy for scammers to give the impression that they know what they are talking about and that they hold the solution that will answer all the problems.

Sadly, this is rarely the case and offers that seem too good to be true are often unfounded. It all points to the fact that you should seek advice from a regulated adviser who will have had to go through lengthy examination process and who is constantly accountable to the Financial Conduct Authority.

Moreover, this advice should be taken on a regular basis to ensure that retirement plans remain on track to meet retirement goals and thus less reliant on high investment returns which are linked to high risk investment solutions.

Visit the FCA ScamSmart website for more tips and resources on protecting yourself and your loved ones from pension and investment scams.

For further advice on avoiding financial scams or if you are concerned about a vulnerable person who may need assistance with their finances, please get in touch with our team.

The value of your investments can fall as well as rise and is not guaranteed.