How you can keep your money safe from pension scams in 2023


When you’re managing your wealth, one of your biggest priorities is likely to be keeping your money safe and away from scams.

Unfortunately, 2022 was a lucrative year for scammers. According to figures from industry body UK Finance published by MoneyAge, Brits lost £1.2 billion to fraud in 2022.

One of the most concerning forms of fraud that you can fall victim to is pension scams. Giving any of your money to a fraudster can be financially and emotionally upsetting, but losing money you’ve diligently set aside for retirement can be particularly disruptive.

Worryingly, data published in Professional Adviser suggests that 1 in 4 savers may be at risk of “opportunistic” pension scams.

So, find out how to make sure you stay safe from pension scams in 2023.

Learn the tell-tale signs of pension scams to help you identify them quickly

With the ever-present danger that pension scams can present, it’s clearly important to be aware of how scammers operate.

That’s why it can be helpful to learn some of the common signs of pension scams, so you can quickly shut down any illegitimate approach before a fraudster can access your savings.

Promises of greater or guaranteed investment returns

Fraudsters often claim that they can achieve market-beating or guaranteed returns on your pension investments.

You can see how scammers might try to use the market volatility and uncertainty of the past couple of years to their advantage. With many investors seeing their pension funds dip in value, an individual claiming to be a professional and offering higher returns may seem tempting.

However, unless they can see into the future, anyone who claims to be able to beat the market by a significant margin is most likely a fraudster.

Meanwhile, no-one can claim to be able to offer “guaranteed” returns. If someone uses this language, they are probably trying to scam you.

Suggesting they can help you access your funds early

A technique that pension scammers commonly use is to claim that they can provide early access to your pension funds.

Typically, you cannot access your pension until the normal minimum pension age. In 2023/24, this is 55, set to rise to 57 in 2028.

There are other mitigating circumstances that may mean you can access your pension early. For example, this might be if you are too ill to work or have a terminal illness with a prognosis of less than a year.

You may also have a “protected retirement date”, reserved for individuals in certain careers, although this would have to have been granted before 6 April 2006.

Outside of these specific conditions, anyone saying they can help you access your funds early in exchange for a fee is likely a scammer.

If you make an unauthorised early withdrawal from your pension, you could face a tax bill of up to 55%. So, be careful if someone claims they are able to “unlock” the value in your pension, because they’re probably up to no good.

Describing convoluted pension schemes, often situated overseas

Scammers will often make claims about early access and improved investment returns by suggesting that they can do this because they have access to an exclusive, convoluted scheme. These are often highly complex and very difficult to understand.

They might suggest that they’ve discovered a “loophole” in the pension rules that allows them to do this. Or they may tell you that these schemes are overseas outside of UK financial jurisdiction, which is why they’re able to offer what they can.

If a potential pension opportunity has any of these traits, it is likely to be fraudulent. Remember: if it sounds too good to be true, it probably is.

Check who you’re dealing with and keep your details secure if you’re unsure

Scammers also have more sophisticated techniques they can use to access your money. For example, they might use a “spoofed” phone number, in which they’re able to pretend that they’re calling from your pension provider’s legitimate number.

Similarly, they may also use “phishing” emails which purport to be from legitimate organisations, such as your pension provider, by using email addresses that look similar to the real thing.

To help you overcome issues like this, it can be sensible to slow down, take your time, and thoroughly check who you’re dealing with.

Read emails carefully and look out for inconsistencies and errors in email addresses. Additional punctuation, suspicious-looking links, and poor grammar or spelling can all be signs that the email isn’t really from your provider.

Meanwhile, if you’re talking to them over the phone, one option is to tell whoever you’re speaking to that you’re going to hang up and call them on a number that you know to be legitimate.

This brings two benefits:

  1. You can be certain that you’re speaking to the right person
  2. Their reaction to this might help to confirm your suspicions – for example, signs it may be a scam could be if they seem bothered that you’re doing this, or try to suggest there’s a time pressure to act.

It’s also vital to keep your details secure if you’re in any doubt over who you’re speaking to. Don’t give them any key information, such as your name, date of birth, or details about your pension if you aren’t 100% certain that it’s definitely your provider.

Remember that cold-calling for pension products is banned

One major point to bear in mind is that cold-calling to sell pension products has actually been illegal since 2019. Companies can face fines of up to £500,000 if they break these rules.

So, if anyone does contact you out of the blue offering you some form of pension product, you can be confident that it’s almost certainly a scam.

Recently, there have also been calls to extend the ban to all financial products, as MoneyWeek reports. This would mean you wouldn’t need to try and decipher whether a call was a scam or not, as you would simply know that any cold-calls are not legitimate.

Get in touch

If you’d like help managing your pension or any other aspect of your wealth, please get in touch with us at Britannic Place.

Email info@britannicplace.co.uk or call 01905 419890 to speak to an experienced adviser today.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

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If you have any questions or queries, a member of the team will always be able to help. Feel free to use the form below or contact us via phone or email.