Skip to main content

When you come to the end of your working life, you’ll probably have a variety of things planned for your retirement – holidays to exotic locations, spending time with the grandkids or trying out a new hobby. But the idyllic retirement that you’re longing for could be ruined if you don’t protect your pension fund.

It can be hard to know who’s trying to catch you out and who’s to be trusted, especially if you’re looking to invest your pension. New research from Citizens Advice has revealed that over 55s are being targeted with fraudulent pension opportunities more frequently through cold-calls and emails.

Pension scams

A study by the City of London Police shed some light on the types of pension scams criminals use. Hundreds of inmates convicted of fraud and other financially motivated crimes were interviewed as a way to understand the techniques used by conmen.

According to the fraudsters, the new pension reforms will apparently make it easier to persuade pensioners to get involved in investment scams. If you’re not familiar with the changes made to pensions in April this year, retirees can now take out 100% of their private pension fund in one lump sum (with 25% of it tax-free) instead of just a quarter.

Supporters of this have praised the fact that it enables pensioners to take control of their finances, while the police have warned that it could leave the vulnerable open to fraud. Citizens Advice warns in particular that scammers are now focusing their attention on persuading pensioners into investing in overseas property or fine wine.

While the interviews with inmates revealed that they often try to fool pensioners with glossy brochures and professional websites, one inmate in particular said that he operated by sending out mass emails offering the chance to win an iPad in an attempt to get people’s contact details. Another said that he would look at lists of company shareholders by checking Companies House and target people under the assumption that they would have money to invest.

Don’t fall for it

Pension scams can come in all shapes and sizes, so if you’ve got a relative who you think could be at risk, remember the following to help you spot one:

Free help: be wary of anyone offering to help you for free, for example, tracing a lost pension.

Quick access: alarm bells should start to ring if you’re offered access to your pension before you’ve reached the age of 55.

Time constraints: you should never be pressured into providing details or signing paperwork.

Be realistic: if you’re offered considerably higher rates of return than other investors on a promotion, it’s likely it’s not legit.

The key when it comes to protecting your pension pot is not rushing into anything without doing your research beforehand. If there’s an investment that you’re interested in, check the FCA’s Scamsmart warning list, as this will give you the names of investment schemes that are known to be scams. If it’s too late and you’ve already accepted an offer that you believe to be a scam, report it to Action Fraud.

You can read more about how to spot a pension scam, here. Remember as well that free pension guidance is available via the government’s Pension Wise service.

Legal Information