Three phrases that could lose you your pension
13th November 2018 16:57
There are plenty of ways to see a good pension disappear, but Moira O'Neill knows how to avoid them.
It is a truth universally acknowledged, that any investor in possession of a good pension must be a target for scammers.
With apologies to Jane Austen, the fraudsters continue to devote as much effort to getting their hands on your pension as the Bennet daughters did to finding a husband.
The Money Advice Service believes as many as eight pension scam calls are made every second. Meanwhile, research from Citizens Advice suggests that 10.9 million individuals have received unsolicited contact regarding their pension since the new rules were introduced.
The top three phrases used by pension liberation scammers to steal savers' retirement funds have been revealed by nationwide campaign group, ACA Pension Life, that rescues victims of these fraudulent schemes.
So, if anyone tries to talk to you about your pension and mentions 'legal loophole', 'sophisticated investor' or 'free', then please walk away as quickly as Elizabeth Bennet from Mr Collins.
If anyone tells you there is a 'legal loophole' that allows you to access part or all of your pension before the age of 55, and that there will be no tax to pay, they're lying and you should disengage immediately.
Likewise, if someone tries to flatter you that you're a 'sophisticated investor' and should be investing your pension in assets which are ‘not traditionally available,’ red flags should be hoisted.
If you are told you can transfer your pension free of charge, make sure you find out exactly what the long-term charges entail. There is no such thing as 'free'.
According to Aegon, more than one in four people (28%) have been offered a free pension review in the past three years.
Kate Smith, head of pensions at Aegon, says that if you are contacted out of the blue and offered a free pension review, the chances are it's a scam.
Both the Financial Conduct Authority and The Pensions Regulator encourage savers to be "ScamSmart" and always check that they are dealing with a regulated adviser or company before doing anything with their pension.
The two organisations advise consumers to follow these four simple steps:
- Reject all unsolicited approaches made over the phone, online, by text or on social media
- Check the adviser or company name on the FCA register (https://register.fca.org.uk) or call the FCA on 0800 111 6768
- Don't be rushed or pressured into making a decision
- Consider getting impartial advice or guidance
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This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
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