What to do if you’re offered a ‘free pension review’

People approaching retirement are increasingly being targeted by fraudsters with an offer of a ‘free pension review’.

Indeed, 28% of pension savers have been offered a ‘free pension review’ by phone, email, or text, according to research from Aegon. 91% of people have received a cold call, the research showed. With the government delaying a ban on cold calling, it’s important to be vigilant against common pension scams.

Kate Smith, Head of Pensions at Aegon, said: “With nine out of 10 people affected by the scourge of cold callers, the government’s ban, which will also cover text messages and emails, can’t come quickly enough. Every month that passes means more people’s pensions are at risk from scammers, intent on separating people from their lifetime savings.”

The average pension scam victim loses £91,000, research from the Financial Conduct Authority (FCA) found. If you’re approaching the end of your working life, it can be a devastating blow to your retirement plans, with limited opportunity to build the money back up.

Unfortunately, many people from all walks of life and backgrounds fall victim to pension scammers, so please share this article with anyone you think could be at risk. There are six steps to take if you’re offered a ‘free pension review’:

1. Check the FCA Register

If you’ve been contacted by someone claiming to be a pension or financial adviser, this should be the first step you take.

Almost a third (32%) of pension holders aged 45-65 don’t know how to verify who they’re speaking to, the FCA survey found. Luckily, it’s a simple step; the FCA Register lists the details of firms and individuals that are regulated. It’s quick and easy to find who you’re speaking to through this.

However, don’t be fooled by just a listing on the register. Use the phone number on the FCA Register to contact the firm directly too. There have been examples of scammers using the ‘clone firm’ tactic. This is where the criminal gives you the legitimate details of a firm but aren’t connected to them at all to build trust. Going to the firm directly means cutting out the fraudsters.

2. Remain cautious of all unsolicited contact

Occasionally unsolicited contact may be genuine, but often this isn’t the case.

‘Free pension review’ is one of the terms the FCA has identified as frequently being used in scams, so tread with caution if it’s something you’re offered, especially if it’s unsolicited.

Remember, it’s not just phone calls that count as unsolicited contact. In the digital age, 59% have been affected by unsolicited emails and 35% have been contacted via text message, according to Aegon. Check all forms of uninvited contact thoroughly before handing over any personal details.

3. Be realistic

Scammers will want to draw you in from the outset. As a result, they may offer you a guaranteed high return, low-risk investments. Be realistic about what your pension fund can achieve; if what a ‘pension adviser’ offers sounds too good to be true, it probably is.

Claims of being able to ‘unlock your pension’ before you turn 55 is another common tactic. This simply isn’t possible in the vast majority of cases; the exception is if you’re diagnosed with a terminal illness.

If you could do with the extra money now or have dreams you’d like to tick off in retirement, it can be tempting to believe such claims. The key here is to keep your expectations realistic. If you’re being offered an incredible deal, step back and ask how it’s possible. If you’re unsure whether it’s too good to be true, seek impartial advice.

4. Take your time before making any financial decision

Never be rushed into a financial decision, especially one relating to your pension. You’ve likely spent decades building up your pension fund and it’s probably a significant portion of your life savings.

What you decide to do with your pension will affect your income during your retirement years. A genuine pension adviser will understand this; they’ll expect you to weigh up all your options and consider what the best course of action for you is. In contrast, scammers will want the deal tied up quickly, so they can part you with your money.

Don’t be pressured into making a snap decision and be wary of behaviour that tries to do so, such as mentioning a ‘limited time offer’.

5. Contact your bank and provider

If you’ve already spoken to someone who offered you a ‘free pension review’ and handed over your details, there are still steps you can take. Firstly, contact your pension provider and bank directly; they may be able to block withdrawals. Next up, you should report the case. Contacting the FCA, TPR, or Action Fraud, can help you to plan what steps you should take now.

6. Seek professional advice

Pensions and how to get the most out of your money can be confusing. This is where seeking professional financial advice helps. Understanding what can realistically be achieved with your pension puts you in control and means you’re better able to spot the approaches of a scammer. If you want to verify offers, speaking to a professional financial or pension adviser can give you the confidence to make a decision.

If you’re worried about your pension and retirement plans, at Balance: Wealth Planning we’re here to help you. You can contact us to arrange a consultation.