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Pension Scams – Understand the warning signs

It’s a sad reality that pension scams are on the rise in the UK. As you are working hard to build your pension fund, scammers are working just as hard to get their hands on it.

At Scottish Friendly, we want you to be alert and avoid falling for these scams.

What is a pension scam?

A pension scam is a form of fraudulent activity which aims to take money from your pension.

Scammers will design attractive offers to lure you in; downplaying the risks to your money to try and persuade you to transfer your pension pot to them, or release funds from it.

Scam tactics include

Contact out of the blue

Scams can often begin with unsolicited contact. Cold calls about your pension have been banned, so please be aware if you receive a phone call, text or email out of the blue from a person or company you don’t recognise - there is a high risk this could be the start of a scam.

The offer of a `free` pension review

Professional financial advice normally isn`t free, and an offer of free advice is a red flag that it may be a scam. The safest way to get a proper review of your pension is to consult a regulated financial adviser.

Promise of high/guaranteed returns

To tempt you in, scammers often promise impressive or guaranteed returns. They may even downplay the risks. If it sounds too good to be true, it often is.

The chance to access, or `unlock`, your pension before age 55

You cannot normally access your pension before the age of 55 and HMRC will also penalise you for accessing your pension early. Is If someone offers to help you do this, it is very likely to be a pension scam that could lead to you losing money.

Pressure to act quickly

You may be told the offer is a one-time offer or must be acted on within a limited period. Decisions involving your finances should never be rushed and you should always take time to consider your options

What should I do If I’m contacted?

Don`t be rushed, or pressurised, into making a quick decision regarding your pension. Take your time and seek financial advice.

We have provided some helpful links below to help you keep your money secure.

Helpful links

The Financial Conduct Authority (FCA) offers further guidance and tips on how to avoid being caught out by scammers. Lean more about their ScamSmart initiative here.

You should always check who you are dealing with; you can check that someone offering you advice is authorised to do so by checking the FCA`s Financial Services Register.

You can also check the FCA warning list to see if the company you are dealing with is known to be operating without the FCA`s permission.

If you need help in finding a regulated adviser you can visit Unbiased.

If you suspect you have been contacted by scammers, please report it to Action Fraud or call 0300 123 2040.

If you have already agreed to transfer your pension and now suspect a scam, please contact Scottish Friendly straight away. We may be able to stop a transfer that hasn`t taken place yet.

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