Pension scams (sometimes called pensions liberation) are on the increase in the UK and savers are urged to check the facts before making an irreversible decision, as a lifetime's savings can be lost in a moment.
Pension scams are enticing savers by claiming to help them access their pension before age 55 or that people can already take more than 25% of their pension as cash. For most people the offers will be bogus and victims will lose most, if not all, of their savings.
Only in rare cases – like terminal illness – can pension scheme members take their pension before age 55. It remains the law that pension scheme members can only take up to 25% of their pension savings as a cash lump sum.
Pension scheme members who agree to transfer may lose all their savings and may still be subject to tax charges of over half their transfer value amount for taking an 'unauthorised payment'.
The scammers have a variety of tricks to catch people out:
- claim that you can access your pension pot before age 55
- approach you out of the blue over the phone, via text message or in person door-to-door
- entice you with upfront cash
- offer a free ‘pension review’ or try to lure you in with so-called ‘one-off’ investment opportunities.
The scammers may even pretend that the Government has asked them to contact you. What they won’t tell you is that you’ll probably never see your pension pot again.
For more information visit www.pension-scams.com
If you are concerned or are suspicious about any pension offers you receive, never be rushed or pressured into making a decision and before you sign anything, contact The Pensions Advisory Service www.pensionsadvisoryservice.org.uk
If you have already accepted an offer and are worried if it may be a fraud contact Action Fraud www.actionfraud.police.uk