Guaranteed and/or high returns
Pension scammers sometimes promise guaranteed returns but this can never be wholly guaranteed. They may also promise unusually high returns to attract investors, which can be tempting, especially given the low interest rate environment.
However, investors who fall for scams rarely see any of their money back.
“Be wary of promotions offering guaranteed and/or high returns.”
Pressure to make a quick decision
Scammers will often try to pressure people into making a quick decision to transfer their pension.
They may state that the offer is a “one-off” investment opportunity that is only available for a limited period or they may send a courier to your home to deliver or collect documents.
“Don’t be rushed into a decision. Take your time and make all the checks you need to satisfy yourself that the arrangement is legitimate and suitable for you before you decide to proceed.”
Upfront cash, early access, and higher lump sums
Scammers may promise cash up front. Such payments can be described as a bonus, loan, cash incentive, advance, rebate, or commission.
Alternatively, scammers may say that consumers can access their pension savings before the normal minimum pension age or obtain a higher tax free cash sum.
“Accessing pension savings before the normal minimum pension age or receiving more cash than would normally be allowed may be illegal and is very likely to give rise to significant tax charges.
“Typically, scammers will claim to be taking advantage of a ‘loophole’ that simply does not exist.”
Some other things to consider…
“Don’t place too much reliance on professional looking websites, brochures or other documents, as it is easy for anybody to create credible looking websites or documents these days. People have fallen for scams by relying on recommendations from friends. Always carry out your own thorough checks and question everything before making a decision or signing anything.
“If you have any doubts, we recommend that you speak to an unconnected, regulated financial adviser. If you have already signed something and you are now concerned that your pension could be at risk, contact the provider of your existing pension arrangement immediately – they may be able to stop a transfer that has not yet taken place.
“Remember – if it looks too good to be true, it probably is.”
