Financial Insights

Scamproof your savings

Scammers are after your pension pot! They will try to lure you with promises of one-off investments, pension loans or upfront cash. Most of these are bogus.

If you are under 55, you cannot release your pension unless you are too ill to work - that's it.

Anyone telling you anything else is either mistaken or scamming you.

If you are over 55, you can release funds from your pension in a variety of ways. You may still be at risk from scammers though. Make sure you use the government's Pension Wise service to understand your options. You might also want to speak to a financial adviser registered with the Financial Conduct Authority (FCA) before making any decisions that could affect the rest of your life.

The warning signs

Here are some of the most common tactics used by scammers.

1. A cold call, text message, website pop-up or someone coming to your door offering a 'free pension review', a 'one-off investment opportunity' or a 'legal loophole'.

2. Convincing marketing materials that promise you (e.g.) returns of over 8% on your investment.

3. Overseas transfer of funds to get access before age 55.

4. Paperwork delivered to your door by a courier that requires immediate signature.

5. A proposal to put your money in a single investment. In most circumstances, genuine financial advisers will suggest diversification of assets.

Scammers don't care wether you're an inexperienced investor or have never put your money anywhere other than a bank. They will try to flatter, tempt and pressure you into transferring your pension fund into an investment with attractive surrounding returns. Once you've signed the forms and the transfer has gone through, it's too late. You'll probably lose all your savings and end up with nothing but a hefty tax bill. Remember, the only people who benefit from scams are the scammers themselves.

How to scamproof yourself

• STOP. Think about it. A genuine adviser will never rush you into a decision.
• Make sure the adviser is registered by the Financial COnduct Authority at www.fca.org.uk/register
• Look at the FCA's Scamsmart warning list at www.fca.org.uk/scamsmart - this will tell you the names of investment schemes that are known scams.
• VirginMedia also has some valuable advice on https://www.virginmedia.com/blog/online-safety/cyber-security-quiz/
• If you are approaching 55 or about to retire, Pension Wise can tell you more about what you can do with your retirement pot. Visit the website at www.pensionwise.gov.uk
• Before you sign anything, call the Pensions Advisory Service on 0300 123 1047 for information and advice about pension scams.
• If you've already signed the papers, report it to Action Fraud at www.actionfraud.police.uk or call 0300 123 2040

If you take financial advice from someone registered with the FCA you may be able to claim compensation if something goes wrong. If the adviser isn't registered you risk losing everything.