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Serious Fraud Office Issues Warning to Watch out for Pension Scams

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It is a good thing the UK Government is planning to introduce the pensions cold-calling ban, because there seems to be no shortage of scammers who are out for your money. While many debate how effective a ban on cold-calling will be for pensioners, you need to be aware of people who are calling you offering help, but are really just looking to scam you.

Being a Scammer doesn’t cost much, so even one or two successful thefts a month make their time invested payoff. Whenever anyone calls you about your pension, house, or anything concerning your financial life, you need to be on the lookout for a scam.

To add to the problem, most people in the UK simply aren’t putting enough away for retirement. According to a recent survey by Sanlam UK, nearly half of the respondents thought that a savings pot of £100,000 would be enough for them to live on after they retire. It is estimated that £100,000 would yield just £5,400 annually, which hardly seems like enough to live comfortably.

Avoid the Scam

Most people want to believe they have enough to retire, which is part of why scammers are able to defraud people before and during retirement. A new set of reforms that were introduced in 2015 gave pensioners a wide range of options for retirement planning, but this freedom has allowed scammers to pitch new ideas that now seem like plausible investment options.

According to a series of reports published in The Guardian:

“One man was persuaded to transfer almost £370,000 out of his workplace pension and put it all into one such scheme supposedly offering an 8%-12% return. The Pensions Ombudsman, which looked at his case, said the ‘blameless’ man had switched out of the ‘secure and generous’ NHS pension scheme and may have lost all his money as a result. Others were lured in with claims that they could more than double their money in just six years.”

It is worth remembering that any investment will carry risk. Investments that are pitched with rates of return that are far in excess of bank rates should be viewed with extreme suspicion. A decade of historically low interest rates has brought the return that one can expect on cash-based investments down, which may be why some pensioners are looking for higher rates of return.

There is No Such Thing as a “Guaranteed Return”

Outside of Government backed pension options, any investment will carry risk. The idea that someone can “guarantee” that an investment will return a certain amount per year should raise red flags, and it would be a good idea to inquire about the person who is selling the investment to the authorities.

If you are looking for ways to receive a guaranteed income there are some ways to do it, especially if you own real estate. The record low interest rates that have dropped fixed-income returns have been a boon to home prices, which opens up the opportunity to use an equity release in order to buy an annuity from a company that is registered with the FCA.

Stay Smart

Any pensioner that is considering a raid on their home’s equity or pension pot should seek out a registered financial adviser. There will probably be pension scams even after the pensions cold-calling ban goes into effect, so it isn’t a bad idea to just ignore any unwanted contact from anyone who wants to discuss your personal fiances.

Personal Pension Guide

Read: Personal Pensions Explained: Complete Guide to Personal Pensions in the UK

If you have been contacted by someone offering you free pension advice, or any other free service that requires you disclose personal financial information, you can call the FCA on 0800 111 6768 or go to their website to check if they are legitimate. Should you find that someone could be trying to scam you, contact the authorities immediately.

It has also come to our attention that some joker with a mailing address in India is sending Barclays’ customers a notice that credit cards may be explosive, which is, of course, another scam. Please remember to be careful with your personal information, and don’t send your credit or debit card to anyone.


Nicholas is an experienced Finance Journalist who has written for a number of prominent online publications. He grew up in Ann Arbor, Michigan with a father that would read him the Wall St. Journal along side of other bed-time fare. He has traveled extensively, and been lucky enough to study a changing global economy in person. Nicholas spent many years in the Southern Cone of South America, sometimes in the middle of the countryside where livestock starts its journey to all points of the globe. Today he is thoroughly bemused with the stance that Central Banks have taken in the wake of the 2008 meltdown. There is no telling what will come out of the global financial system next, but he is glad that he lives somewhere that gold can be bought and sold readily!

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