Pension fraud is on the rise.
And with scammers targeting people’s retirement savings, it’s more important than ever to protect your pension from fraudsters.
Last year alone, £17.7 million was lost to pension scams across the UK, with an average loss of £46,959 per person.
Action Fraud and the Financial Conduct Authority (FCA) are now running awareness campaigns to help you safeguard your hard-earned retirement funds.
Here’s what every saver needs to know to keep their pension safe from fraud:
1. Beware of Unsolicited Pension Offers
One of the biggest warning signs of a pension scam is receiving an offer out of the blue—whether it’s a “free pension review” or a “special investment opportunity.”
Scammers know that a personal touch can make you feel secure, which is why they often call or email offering exclusive deals or “insider” investment tips.
How to Protect Yourself:
If you get a cold call or unsolicited email about your pension, the safest move is to hang up or delete the message.
UK law prohibits companies from making unsolicited contact about pensions.
If someone reaches out without warning, they’re likely breaking the law - and probably trying to scam you.
2. Research and Verify Any Financial Advice
Scammers will often impersonate legitimate financial advisors or companies, even creating fake websites to look more credible.
With promises of high returns, they aim to lure you into risky, unauthorised investments.
How to Protect Yourself:
If you’re thinking about making changes to your pension, only seek advice from trusted, FCA-authorised advisors.
You can check any financial advisor’s credentials on the FCA Register to confirm they’re qualified and authorised to provide pension advice.
Avoid any “advisors” recommended by the company that contacted you—they’re likely part of the scam.
3. Be Cautious of High-Return Investment “Opportunities”
Scammers often use time-limited offers and high-return promises to create a sense of urgency, pressuring you to invest quickly.
These “opportunities” usually downplay risks, aiming to get your money before you have a chance to think it through.
How to Protect Yourself:
Take your time to research any investment before committing.
Legitimate firms won’t rush you or promise returns that sound too good to be true.
Watch out for pressure tactics, downplayed risks, or any promises of guaranteed profits.
4. Understand Tax Implications for Pension Withdrawals
Some scams involve persuading you to access your pension early or make “unauthorised payments.”
Doing so could result in massive tax penalties, with up to 55% tax on unauthorised withdrawals.
How to Protect Yourself:
Be aware that you’ll face significant tax implications if you access your pension before age 55 (with limited exceptions).
Scams often exploit this by offering ways to “unlock” your pension early, but these offers are illegal and come with hefty penalties.
Always consult a qualified advisor before making any changes.
5. Review Your Pension Regularly
Many people discover they’ve been scammed when they review their pension at the start of the financial year.
April tends to have the highest number of reported pension fraud cases, as people realise they’ve been defrauded only after reviewing their pension status.
How to Protect Yourself:
Make it a habit to check on your pension regularly. Reviewing your statements can help you spot any unusual activity early.
The sooner you notice something amiss, the better your chances of minimizing losses.
What to Do If You Think You’ve Been Scammed
If you suspect you’ve been targeted or have fallen victim to a pension scam, take these steps immediately:
• Report the Incident: Contact Action Fraud online at actionfraud.police.uk or call 0300 123 2040. In Scotland, report it to Police Scotland on 101.
• Inform Your Bank: If you’ve made a payment, notify your bank right away. They can help prevent further losses and monitor your accounts for suspicious activity.
• Monitor Your Accounts: Regularly check your bank statements and pension accounts for any unusual activity.
Wrapping It Up
Losing any portion of your retirement savings to a scam is devastating, but with a few proactive steps, you can help keep your pension safe from fraud.
By being cautious about unsolicited offers, verifying financial advisors, and understanding tax rules, you can protect your lifetime savings from those trying to take advantage.
At Be Hard to Hack, we’re here to help you stay vigilant and secure your financial future.
Whether it’s pension fraud prevention or general cybersecurity, our tips are designed to keep you safe in today’s digital landscape.
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