Protecting your pension assets - why you need to take good advice
PUBLISHED: 11:06 04 September 2015 | UPDATED: 11:24 04 September 2015
With the new rules for accessing pension plans recently taking effect, it is a good time to be extra cautious if you own any form of pension plan and are approached with offers promising you access to cash from your old pensions.
Criminals have become increasingly sophisticated in the ways they seek to cheat people out of their pension pots.
There are many different types of scam:
• The offer of an investment or other business opportunity that you’ve not previously spoken to them about
• A promise to get your pension money before you’re 55
• Offering exotic ways that you can invest your pension money
A cold call doesn’t have to be a telephone call. It can be any type of contact they’ve made with you unexpectedly, e.g. an email or text.
The reality is that you can only take your pension money before you are aged 55 in rare cases (i.e. if you are seriously ill).
Scammers may offer you tempting ways to invest your pension pot, which can appear very convincing. However their aim is to get you to cash in your pension pot and transfer the money.
Once you’ve transferred your money into a scam, it’s too late, so it is important to protect your valuable asset by following some simple steps.
Step 1 - Look out for warning signs such as:
• You received a cold call about your pension money, via the phone text or e-mail
• The Company says you can access your pension money before 55 and that they can help you with this
• They encourage you to take out a large lump sum, or your whole pension pot in one go, and to let them invest it for you
• They advise you to transfer your money quickly, even sending documents to you by courier – never make a rush decision about your pension money
• They may use words like ‘pension liberation’, ‘loan’, ‘loophole’, ‘free pension review’ or ‘one-off investment’
• They offer you an investment described as ‘unique’, ‘overseas’, ‘environmentally friendly’, ‘ethical’ or in a ‘new’ industry
Step 2 - Check out your adviser and their Company
• If you plan to do business with a firm or individual, use the Financial Services Register to find out if they are allowed to offer the service or product you are interested in - www.fca.org.uk/register
Step 3 - Understand your options
• You can obtain high quality advice tailored to your personal needs from an Independent Financial Adviser. There is a fee for this type of advice but it will be based on your personal circumstances, your attitude to risk and your capacity for loss. Sometimes based on a thorough analysis of your circumstances and particular pension plans the advice may be to leave your pension where it is. An adviser will make this clear for you. The Personal Finance Society provide a register to search qualified advisers in your area - www.thepfs.org/membership/findanadviser
If you do not wish to engage with a financial adviser the Government has set up a place where you can gain some guidance. Pension Wise is a free and impartial service that offers this guidance to those age 50 and over on defined contribution pensions. To understand your options, go to Pension Wise. Remember they are not offering personal advice based on your individual circumstances rather they are providing they help you understand the general options that are available - www.pensionwise.gov.uk
Never be rushed into making a decision on your valuable pension assets. Before you sign anything it would be a good idea to look at the Pensions Advisory Service who provide a wide range of information on pension schemes and they do not charge a fee for any of their services - www.pensionsadvisoryservice.org.uk
The new rules on accessing pensions will be very beneficial to many people.
However there has never been a more important time to think carefully about this important part of your retirement planning. Get good guidance, take impartial advice and do not be rushed into transferring this valuable asset into the hands of unscrupulous individuals because if you are duped into doing so, then it is gone forever.