Since the UK government introduced pension reforms in 2015, there has been a huge increase in pension scams with unscrupulous firms targeting the over-55s with advice regarding what they can do with their retirement savings. Statistics issued by the Pensions Regulator in January, show that, on average, victims of scams lost £91,000 in 2017.
Receiving unsolicited telephone calls should be a thing of the past with the UK government having clamped down on this unwelcome activity – making it illegal for anyone to make such calls from January this year. There is however no such rule in Cyprus, so you must be aware of the risks when discussing your pension savings with a firm that you have either not heard of or who are not authorised to give you such advice.
Cold calling is the most common method used to initiate pension fraud. The Money Advice Service estimates as many as eight scam calls occur every second – the equivalent of 250 million calls per year. The changes to pension rules in 2015 now mean that pension pots can potentially be fully cashed in – resulting in the countless scams suggesting all sorts of supposed investments that either don’t exist or offer supposed guaranteed returns.
With interest rates at less than 1%, guaranteeing returns of 8-12% is quite simply impossible. If you are offered these types of returns then the only guarantee is that it is a scam. If you unfortunately receive an uninvited call from someone asking you about your pension savings then I suggest the following points to ensure that you are not the latest victim:
- If you are contacted unexpectedly about your pension fund by phone or SMS this is an automatic signal that it is a scam as it is illegal in the UK;
- If the caller says that you can access your pension money before age 55 and that they can help you release the money then this is again illegal;
- If you are encouraged to take out a large lump sum, or even the whole pension pot in one go, and that you are told they can invest it for you is a tell-tale sign of a scam;
- If the caller uses words like loophole or one-off investment opportunity then it is likely to be a fraud;
- If you are offered investments that are described as being ethical, new opportunities especially in sectors such as forestry, overseas hotels, storage units, airport parking spaces then they more than likely don’t even exist.
The good news is that you can get professional, regulated advice on your UK pensions and we have been doing exactly that for over 30 years. We would never offer any investment scheme without first going through our thorough Fact-Finding process. Only then can we determine whether transferring your pension is in your best interest. The key therefore is to not be drawn in by unsolicited calls from someone promising you something that does not exist. Instead, only consider firms that are well established and authorised to help you.
The above article was kindly provided by Mark Hollingsworth, Regional Manager, Malta from Blacktower Financial Management Group and originally posted at: https://www.blacktowerfm.com/news/675-how-to-avoid-a-pension-scam