How to avoid pension scams in 2022

How can you be scam aware in the digital age? Here are our top tips for avoiding pension scams.

Scammers are becoming increasingly intelligent in the digital age. By designing attractive offers, they trick you into sending them money and personal details. Because of this, pension scams are on the rise.

More and more individuals are falling victim to advanced pension scams. By asking you to withdraw or transfer your pension pot, scammers can steal a large proportion of your savings.

According to the Financial Conduct Authority, scammers can persuade you to transfer your pension pot to them in a number of ways. From here, it’s then invested in unusual and high-risk investments – or even stolen outright.

Common methods include pension review scams or early pension release scams. For pension review scams, users are contacted out of the blue and offered a free pension review. Usually you’ll be contacted by phone, email or advert.

When it comes to early pension release scams, scammers claim to offer you early access to your retirement funds – before you’re 55. If you’re contacted with this information, it’s almost certainly a scam, so be vigilant. In these cases, you’re still liable to paying added tax on money you withdraw from pensions – even if you’re doing so as a victim to a scam.

Here’s how to avoid pensions scams in 2022.

Ignore cold calls or unusual attempts to contact you

If you receive a telephone call out of the blue regarding your pension, hang up immediately. According to the FCA, it’s almost always likely to be a scammer trying to obtain your details. It’s recommended to report these calls to the Information Commissioners Office, to protect others from falling victim to the same scams.

Equally, the same applies if you receive unsolicited offers via email or SMS. It’s incredibly uncommon for your pension provider or financial advisor to contact you in this way – especially if it’s out of the blue. If you’re still unsure, contact your provider directly using the number listed on their website.

Additionally, if a close friend or family member recommends abnormal pension advice to you, always be aware that they may also have fallen victim to a scam.

Check they’re FCA-certified

Most pension scammers falsely claim to be FCA-certified. Frequently, scammers even claim to be acting on behalf of the FCA. However, this isn’t always the case.

The Financial Services Register (FSR) lists all information regarding financial firms which are FCA-certified. Always check this register before making any decisions regarding your finances.

Additionally, be careful that the contact number used to get in touch with you is correct. It’s best practice to use the contact details listed on the FSR.

Get in touch with your financial advisor

Before making any decisions regarding your finances, we recommend getting a second opinion from a trusted financial advisor. By having a second pair of eyes on your decisions, you’re better equipped to make choices which further your personal wealth.

At Hamnett Wealth Management, we’re trained to stay scam aware. We can provide you with independent, impartial advice which helps you reach your financial goals. If you’d like to find out more about our services, you can get in touch here.

What to do if you’ve been scammed

If you sense you’ve fallen victim to a pension scam, contact your pension provider immediately. In some cases, they might be able to prevent a transfer from taking place.

It’s recommended to report the scam to the Financial Conduct Authority by contacting their Consumer Helpline on 0800 111 6768, or by using their reporting form.

As you’ve already been successfully scammed, it’s commonplace for scammers to target you once more. In some cases, they may even sell your details to others. Make sure to follow the tips outlined above and be extra cautious when it comes to your finances.