Staying safe from pension scammers: The things you should know to help you protect your long term savings

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• Standard Life, part of Phoenix Group, shares essential tips to be aware of about pension scams

Dean Butler, Managing Director for Retail Direct at Standard Life comments: “With high inflation still driving up the cost of living in the UK, and interest rates rising, many people will be feeling more financially vulnerable than before. Sadly, tough periods are boom times for scammers, as it’s easier to exploit people who are struggling. Pension savings are often targeted by criminals as they can be high value and rules around pensions are complex – confusion is a key tool in a scammer’s arsenal.

“Put simply, a pension scammer will try to trick you into handing over your pension savings. This could involve you transferring your pension pot into a non-existent or high-risk scheme, or being persuaded to release some or all of your pension pot. Scammers often try to tempt their victims with offers of better returns, one-off opportunities, or access to their pension savings before the minimum pension age of 55. Unfortunately, if you fall victim to a pension scam, it’s likely you’ll find it very difficult to get your money back. It’s therefore incredibly important to understand how pension scams work, how to spot the warning signs, and what to do if you’re not sure something is genuine. This could help you protect your savings and avoid becoming a victim in the future.”

Dean Butler outlines the things you should be aware of to protect you from pension scams:

How do pension scams work? “Pension scams can target victims at any age or stage of life, whether you’re paying into a pension plan or taking money from one. Pension scammers often prey on people’s anxiety, and may promise higher returns to savers or offer pensioners the prospect of extra money. They can be very convincing, developing techniques to draw people in. Known scams include promising ‘higher’ or ‘guaranteed’ returns (perhaps through investments like overseas property, renewable energy bonds, forestry, parking, storage units, art or even cryptocurrency), and telling you that you can access your pension savings early through a loan or loophole.

What warning signs should I look out for? “A pension scam often starts with an out-of-the-blue email, letter, direct message on social media, or phone call. The scammer may describe themselves as a pension adviser or pretend to represent a government agency, legitimate financial services firm, or well-known personal finance expert. Some of the key signs to be wary of include:

• Phrases like ‘free pension review’, ‘pension liberation’, ‘loan’, ‘savings advance’ or ‘cashback’
• Offers of guaranteed or high returns from unusual, unregulated or overseas investments, offering no consumer protection – It’s worth noting the investments usually require you to transfer your pension savings into a new scheme, and a scammer claiming to be an adviser may take multiple fees along the way. Investments that are only available after a transfer could be a sign of a possible scam
• Help to release upfront money from your pension plan before the age of 55
• Pressurised sales tactics that refer to opportunities being ‘time limited’ or ‘one-off’
• Complicated investment structures – For example, you could be ‘advised’ by a scammer to invest in a bond held by a pension scheme. Due to the investment structure, you may pay charges for the pension scheme and the bond. The bond may be provided by a company connected to the scammer.

How can I avoid pension scams? “If you’re unsure whether or not you’re being scammed, it’s better to play it safe and not take action around your pension savings until you are certain. There are extra precautions you can take too:

• Don’t be rushed into anything - If you’re pressured into making a quick decision, there may be something wrong so always take your time to do some research
• Don’t just take their word for it - Scammers may give convincing answers to your questions or tell you about websites or phone numbers where you can check their information. Rather than be sucked in by this apparent openness, do your own research online, using sources other than the ones they recommend
• Visit the FCA’s ScamSmart website – The FCA’s ScamSmart campaign provides a wealth of guidance and help on how to protect yourself against scams
• Check the FCA’s Financial Services Register - If the person or firm isn’t listed there, you won’t have access to the Financial Services Compensation Scheme or the Financial Ombudsman Service. It’s also important to check if there are any non-UK addresses involved if you’re dealing with an individual or company, as sometimes a person providing advice could be with a registered firm in the UK but is actually giving advice in the name of an overseas company that’s not FCA-registered
• Consider getting financial advice about any pensions change. If you don’t have an adviser, you can find a list of advisers on Unbiased - an independent site that can help you find an adviser.

What should I do if I think I have been scammed? If you suspect you’ve been approached by scammers, report it quickly to the FCA online or on 0800 111 6768.

If you’ve lost money to a scam, you can report it to Action Fraud online or on 0300 123 2040, or Victim Support Scotland online or on 0800 160 1985.

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About Standard Life

• Standard Life is a brand that has been trusted to look after peoples' life savings for nearly 200 years
• Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employer' pension scheme.
• Standard Life is part of the Phoenix Group, the largest long-term savings and retirement business in the UK. We're proud to be building on nearly 200 years of Standard Life heritage together
• Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
• We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about.
• The value of investments can go down as well as up, and may be worth less than originally invested.