What is pension fraud?

The coronavirus outbreak has affected all kinds of companies, including those listed on the stock market. As a result, markets have been volatile and are likely to remain so for a while. This can have an impact on pensions, leading to additional worry for savers. It can also lead to an increase in scams, as unscrupulous people try to take advantage of uncertainty.

Pension frauds, or pension scams, target pension scheme members with the aim of parting them with the money they have saved for retirement. Fraudsters might ask their victims to transfer their pension pot into fake schemes set-up to defraud people of their investments. Or, they might offer them cash incentives to gain early access to their pension benefits - referring to them as a pension loan. But these so-called opportunities often turn out to be a scam and leave the pension holder with significant losses and serious tax implications.

Spotting and avoiding pension fraud

If you're looking to make any changes to your pension arrangements, be cautious and do it the safe way. Do your own research first, and seek advice from an impartial source, such as a financial adviser or accountant. It’s wise to wait until you’re armed with all the right information for your specific needs, before making any changes. 

Take your time. Thoroughly check out the firm or person that you are dealing with to ensure that they are reputable and ensure that any provider or scheme you are considering is genuine.

Unexpected contact
Unrealistic offers and promises
Persuasive and time-sensitive sales tactics
Unusual investment opportunities
Offering early access to your pension
Impersonation of firms and ‘government’ schemes