PENSION SCAMS

RMT helpline 0800 376 3706 :: february 2022 :: RMTnews 16 Pensions expert Carolyn Stanton explains what they are and how can you protect your pension benefits Over the last few years, the risk of losing some or all of your pension to scammers has increased. Official figures on pension fraud show that in the five-year period from January 2015 to December 2019 there were approximately 3,000 crime reports received by Action Fraud. Sadly, the true scale of pension fraud is likely to be much higher than this, as victims often don’t realise they have been scammed until they want to put their pension into payment – sometimes many years later. And some people do not want to acknowledge publicly that they have been a victim of a scam. The Pensions Regulator (TPR), the Department for Work and Pensions (DWP), and the pensions industry as a whole had previously implemented measures and checks to try to prevent scams from happening but from November 2021, these protections have been beefed up. WHAT IS A SCAM? Pension scams are serious. Scammers use different ways to persuade people to transfer their pension savings, by promising opportunities that are too good to be true, like investing in overseas property, renewable energy bonds and parking that seem to promise high returns. Scammers persuade savers to transfer their money into single member occupational schemes, or other occupational pension schemes that seem legitimate. They might promise people early access to their pensions via loans or ‘loopholes’ as an incentive to transfer. But some or all of the funds are then simply stolen outright. Frustratingly, many people have ended up losing some or all their pension savings to pension scammers, and then may also end up with a large tax bill because they have accessed their pension prior to the minimum pension age (currently 55). WHAT ARE THE TELL-TALE SIGNS OF PENSION SCAMS? Typical methods used by pension scammers include: • Contacting you out of the blue either by phone, text or email (this is known as cold calling) • An offer of a free pension review • The promise of help to access your pension savings before age 55 (the current minimum pension age) • The promise of guaranteed returns on your investment • Low tax/tax-free withdrawals, including tax- free lump sums • ‘Cash-back’ or ‘savings advance’ from your pension PENSION SCAMS