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How to spot a pension scam

How to spot a pension scam



This information is brought to you by lawyers for Expats Thailand and their pension business partners.

It will be part of a series of pension blogs to assist and inform our clients about pensions.

Your pension is likely one of your largest assets and may have taken many decades to build. Therefore, when considering your options with your pension you should consider a few key areas to ensure that you do not become the victim of a pension scam. Phrases like 'one-off investment', 'savings advance' and 'cash back' are a common sign of pension scams. We have outlined some key guidance as to how to ensure that you never fall foul of a scam.


What’s a pension scam?


Since April 2015, the government’s pension reforms enabled far greater freedoms to over-55s. In essence, this gave enhanced control over the structuring of your retirement, enabling full access to your pension from age 55 should you wish. Consequently, tens of thousands of people now benefit from such freedoms and enhanced withdrawal of their pension wealth. It is these freedoms that scammers are trying to exploit, and ultimately rob people of their hard-earned and saved retirement income.


Pension scams have been in existence long before 2015, however, the recent pensions freedom legislation has resulted in more avenues for scammers to try and access your pension pot – some of the most common scams are listed below.


· pension loans

· early pension release

· pension selling

· cashing in your pension

· pension liberation


All of these names are essentially the same thing – an agreement that promises you access to your pension funds before 55 by transferring to an alternative arrangement.

Equally, if over 55, scammers may promise access to larger amounts of your pension than is currently permitted under law


Often, these criminals may promote a ‘too-good-to-be-true’ or ‘one-off’ investment. Initial contact and offering is often initiated through unsolicited phone call, text message or email. In some circumstances, up front cash incentives are used as a means of enticement. A common proposition is a ‘free pension review’ which is positioned by the scammer to give the impression that they are a trustworthy independent adviser acting in your best interests.


Similarly, some scammers might suggest you ‘liberate’ your pension which will then be transferred into one of these too-good-to-be-true schemes before you turn 55, which isn’t permitted under the new rules


You should only get a review from an Independent Financial Adviser who is working for a regulated firm and proposing products that are fully regulated with the Financial Conduct Authority (FCA).


How do I avoid pension scams?


If someone calls you out of the blue you should always be suspicious and act caution. If anyone calls to offer you a money-making deal, then this should be an instant red flag and you should end the call.

A good initial test for a company’s legitimacy is, if a representative calls you, always ask to call them back. Reputable companies are very accommodating and will follow your preference for engagement, whereas scammers tend to be more reluctant to give contact details.


Any analysis of your pension should be conducted by a regulated financial adviser who demonstrates a client-centric approach whilst acting with professionalism and integrity. Recently there have been reports that some firms might offer free guidance on your pension, acting under the false guise of a government body such as Pension Wise, which the government has made an offence in recent legislation.


Research the company


The most important due diligence to undertake is to check the FCA’s register of regulated financial services providers. This will confirm that the company is registered and regulated whilst also listing any companies currently under investigation. In addition, when an advisor makes a recommendation, always ensure that the proposed products are regulated by the FCA and hold subscription to the FSCS (Financial Services Compensation Scheme).


Should you ever hear from a company claiming to be government-endorsed, this will be incorrect and should be treated as a scam. Before proceeding, ensure that you are certain your money will be safe.


In many instances, transferring a pension has many benefits that give people greater control and freedom over their retirement. It is important to receive regulated advice on your pension, check your advisor on the FCA register: https://register.fca.org.uk/s/


Lawyers for Expats Thailand offer an array of legal solutions for expats living in the kingdom of Thailand.


We also can advise through our chosen partners pension and insurance advice.


Do not give out to strangers any personal information ensure you know who you are speaking with.


If something seems too good to be true it normally is.


If in doubt contact us we can conduct due diligence for you.


If you think you have been the victim of any scam contact us immediately on +66956583038 or email on info@lawyersforexpatsthailand.com

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