Pension scams

Such scams happen when criminals exploit the pension liberation provision. First, they advise the victim to review their account to reduce tax or get higher cash benefits. Then, they offer free reviews and guarantee a refund of all the related fees or falsely represent the anticipated returns from the offered scheme.

They target people with the highest deposits in their account and can access their pension pot, and their age is around 55 years.

They make unsolicited calls, send text messages, or sell in person door-to-door.

They lure into a one-off deal and then ask for refundable deposits to get the benefit.

How To Protect Yourself?

• If you get any such call, hang up. Check the credentials of the individuals or firms offering the deal. For example, it should be registered with the FCA, and the other clients should have posted positive reviews.

• Ask for statements and details of returns or profits, and seek expert advice. 

• Never buy any such plan in a hurry. Instead, discuss the offer with friends and take your time to decide. 

• Do not accept unusual offers, high-risk, unregulated and those that have no consumer protection. Beware of terms used like “one-off”, “saving advance”, or “cash back.”

• Avoid deals claiming they can get better returns through unapproachable complicated projects where the money is blocked for years, like renewable, overseas properties or forestry projects. 

• They offer free pension review and claim they can release cash from the account before 55 – but they may not tell about the tax bills on such withdrawals. 

• Avoid complicated schemes where the sales representatives use high-pressure tactics or send couriers with documents and wait to get the signed copies in a few days. 

• Avoid the deals where one may not be able to get their investment back for several years. These are the projects where one may not realise the problems in the scheme for many years. 

• If you suspect a fraud, report it to the authorities.