Scams

Fraud can happen to anyone. It comes in all shapes and sizes from fake emails to fake sites and it’s continually changing. Scammers use lots of different ways including social media, texts and emails.

Fraudsters may contact you pretending to be anyone from HMRC, to your company’s CEO, asking you to transfer money, to give them information or offering a free pension review. They often rely on these tactics to encourage you to click links or open an attachment and things to look out for include:

Urgency: Tight deadlines with a threat of negative consequences to distract you and discourage closer scrutiny
Pressure: Pretending to be from an official source (such as the police) to encourage following their instructions without questioning
Curiosity: Looking like something interesting or intriguing.

Stop! Think Fraud

If you get an unexpected email or phone call like this, hang up and get in touch with the company directly using a contact method you already know or details you find independently on official correspondence or online.

Your pension is safe with us and if you’ve concerns about the validity of any Lothian Pension Fund communications, get in touch.

There’s lots of helpful information at How to spot fraud - Stop! Think Fraud and to help keep yourself safe from scams.

Helping to protect you against fraud

We’ve a duty to look for signs of a pension scam when a member decides to make a transfer - Considering a defined benefit pension transfer | FCA. The kind of things scammers might offer include:

A transfer of a pension to an arrangement that allows benefits to be paid out before age 55 (the earliest age from which pension benefits can normally be accessed)
Promises to pay out a tax-free lump sum greater than HM Revenue & Customs allow after age 55
Promising pension scheme members can cash in their benefits early by transferring their pension savings to them
Enticing people with pension loans or cash incentives.
Proposing the transfer payment is invested in very high-risk investments
Promise rates of return on investments which are very unlikely to be realised

Information like this can be very misleading and in some cases, may also be fraudulent and entirely illegal. Falling foul of a scam could mean you lose some or all of your pension savings.

Keep your pension safe

Follow these four key steps from the FCA to protect your pension:

Step 1

Step 2

Step 3

Step 4

Step 1 – Reject unexpected offers

Scammers are often unknown contacts who will attempt to gain your trust through false claims. They will likely claim to be authorised by the FCA and will present you with unsolicited, attractive investment opportunities in an attempt to gain control of your pension pot. In other circumstance the money may be stolen outright. If an offer seems too good to be true, it likely is just that.

Step 2 – Check who you're dealing with

Remember that it isn’t usually possible to cash in your pension before the age of 55, except in cases of ill-health or where you have a protected retirement age that is below 55. Equally, you should be wary of offers for “free” pension reviews, “guaranteed” returns on pension investments or complicated, long term investments plans. FCA regulated advisors would never offer such services and opportunities. If you’re concerned about a potential scam you should report your suspicions to Action Fraud or the Financial Conduct Authority.

Step 3 – Don't be rushed or pressured

High pressure sales tactics are a common sign of a pensions scam. You should be wary of time limited offers to get the “best deal”. Be wary of promised returns that sound too good to be true and don’t be rushed or pressured into making a decision.

Step 4 – Get impartial information or advice

If you are deciding to transfer your benefits, consider consultation with the Pensions Advisory Service or an FCA regulated advisor before doing so. Those over 50 with a defined contribution pension, should consider booking an appointment with Pension Wise.

Common signs of pension scams include:

Phrases like ‘free pension review’, ‘pension liberation’, 'loan’, ‘loophole’, ‘savings advance’, ‘one-off investment’, ‘cashback’
Guarantees they can get better returns on pension savings
Help to release cash from a pension before the age of 55, with no mention of the HMRC tax bill that can arise
High pressure sales tactics – time limited offers to get the best deal, using couriers to send documents, who wait until they’re signed
Unusual high-risk investments, which tend to be overseas, unregulated, with no consumer protections
Complicated investment structures
Long-term pension investments – which often mean people who transfer in do not realise something is wrong for several years.

Check if a firm is FCA-authorised

In the UK, nearly all financial service activities must be authorised or registered by the FCA and the Financial Services Register is a public record of firms, individuals and other bodies that are, or have been, authorised by them or the Prudential Regulation Authority (PRA).

If you’re thinking about a pension transfer, check the FCA's to see if a firm or individual is authorised or registered. You should always access the register from the FCA’s website and not through links in emails or on the website of a firm offering you an investment.

If you get in touch with us about transferring your pension benefits to another scheme which is not part of the Public Sector Transfer Club, as part of our Standard checking process, we’ll ask questions to help us prevent you from being the victim of a pension scam.