Beware of pension scams
While you can rest assured that your Nestlé pension is safe, if you have other pensions elsewhere that you haven’t taken yet, it’s important to keep those retirement savings safe too.
Sadly, pension scams are all too common. It doesn’t matter how little or how much you’ve saved into your pension, scammers can target anyone – with the average victim losing around £91,000.
Scams are hard to spot and are often disguised with sophisticated-looking websites, testimonials and materials which can make them look really convincing.
That’s why it’s so important to know how to spot the signs of a scam – these can include:
- Someone contacting you out of the blue (also known as ‘cold-calling’), which is now illegal if it’s related to your pension
- Promises of high returns on investments
- Offers of a free pension review
- Promises that you can cash in all of your pension before the age of 55
- Pressure to make a decision quickly
- The company won’t let you call them back
- Offers of helping you use tax loopholes to your advantage
If you're contacted by someone who makes any of these promises, it’s best to end the call or, at the very least, do more research if you decide to speak to them again.
Don’t let it happen to you
The Pensions Regulator (TPR) has produced a video case study featuring children’s critical care nurse Pauline. In the video, she shares her story of being scammed out of her entire pension and warns others not to fall victim.
How to protect yourself from pension scams
To help you spot the signs of a scam and protect yourself from them, the Financial Conduct Authority and The Pensions Regulator suggest following these four simple steps:
1 Reject unexpected offers
If anyone calls you out of the blue about a pension opportunity, the chances are it’s a scam. It’s now illegal to cold-call anyone about their pension so, if you're receiving an offer from a company you’ve never dealt with before (or even one that you have), it may be a scam. Don’t be afraid to end the call and make sure you don’t hand over any personal details.
2 Check who you’re dealing with
The Financial Conduct Authority (FCA) has a dedicated ScamSmart page you can use to search whether the person or organisation who has approached you is authorised. ScamSmart also has tools to take you through the details of any offer you’ve been made to help you identify if you’re being scammed.
If you’ve used ScamSmart and you’re still not sure whether the offer you’ve been made is trustworthy, you can call the FCA Consumer Helpline on 0800 111 6768. They’ll be able to tell you whether the organisation or person you're dealing with is permitted to give pension advice.
If you don’t use an FCA-authorised company, you risk not having access to compensation schemes if things go wrong.
3 Don’t be rushed or pressured
Take time to make all the checks you need to – even if this means turning down what seems to be the opportunity of a lifetime. Scammers will often put pressure on people to act quickly to avoid missing out on an ‘amazing deal’ so they can convince you to give them your money before you’ve had time to think about it properly. As a general rule of thumb, if an offer sounds too good to be true, it probably is.
4 Get impartial guidance or advice
Most people spend their whole working life building up their pension savings, so it really is worth taking the time to make sure that what you’re doing is right. In some cases, you have to get advice before you transfer anything out of your pension savings.
A good place to start is by getting in touch with MoneyHelper who offer free government-backed independent and impartial guidance about pensions and retirement.
If you have defined contribution savings (like DC Start and DC Core) and you’re over 50, you can also book a free Pension Wise appointment to discuss the options you have for accessing your DC savings with a trained pensions specialist.
If you’re still working for Nestlé when you retire, Nestlé will also pay for you to get free personalised guidance provided by an independent financial adviser.
5 If you suspect a scam, report it
You can report an unauthorised firm or scam to the FCA using their online reporting form or by calling 0800 111 6768.
If you suspect a scam report it online to Action Fraud or call 0300 123 2040.
Be scam smart with your pension. To find out more, visit fca.org.uk/scamsmart
Other useful information about scams
Before you consider transferring your pension, we’d also recommend you look at the following websites and helpful materials.
The Pensions Regulator (TPR)
The Pensions Regulator has lots of detailed information on their website about how to protect yourself from pension scams.
The Pension Scams Action Group (PSAG)
The Pension Scams Action Group is a multi-agency taskforce of law enforcement, government and industry, including TPR, working together to tackle pension fraud.
Download the PSAG pension scam pdf leaflet about how to identify and protect yourself from scams, and what to do if you think you’re being scammed.
ScamSmart
The Financial Conduct Authority’s (FCA’s) ScamSmart website provides lots of useful information about how to spot a scam, how to check out what you are being offered is legitimate and many other useful resources.
If you have defined benefit (DB) pension benefits and you're considering transferring them out of the Fund, read this useful guidance from the FCA.
MoneyHelper
MoneyHelper also provides lots of helpful information about how to spot and protect yourself from a pension scam, and what to do if you think you’ve been a victim of one. Find out more on the MoneyHelper website.
A letter about transfers from TPR, the FCA and TPAS
For information on what to watch out for if you’re thinking about transferring your pension, read a letter from The Pensions Regulator, the Financial Conduct Authority and The Pensions Advisory Service (TPAS is now part of MoneyHelper).