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What is a pension scam?
A pension scam often involves a fraudster targeting someone who has access to their pension and involves encouragement to move the funds, which may result in money being lost or unreasonable charges.
Accessing your pension before the age of 55
A promise to convert your pension to cash before retirement, and sometimes before the age of 55, can also be called pension liberation.
This name makes it sound positive, but it is not usually possible to access your pension before the age of 55 unless you are seriously ill.
If someone offers you a scheme like this, it’s probably a scam and will result in serious tax consequences.
In fact, taking your pension early mean you’re charged up to 70%. On top of that, the company offering this will probably have transfer fees that could also take a large portion of your pension pot.
Investing your pension in to a dodgy scheme
If someone calls you out of the blue offering you an investment scheme with attractive returns for your pension pot, then it’s likely to be a scam.
If you’re over 55 and are deciding what to do with your pension pot, always speak to a legitimate financial advisor.
How to protect yourself
If you’ve had a call about a pension scheme and you aren’t sure if it’s genuine or not, there are a few steps you can take to double check.
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1
Check if the person or company is legitimate by taking a peek at the Financial Services Register or calling the Financial Conduct Authority on 0800 111 6768.
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2
If the call is from a company you recognise but you’re not sure if it’s legitimate, put the phone down immediately, find the company’s phone number on their website and ring them directly.
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3
Don’t give away your financial or personal details over the phone. A legitimate scheme and company will not ask for these.