Pension scams are on the rise in the UK. However, many savers remain in the dark about how to best protect their retirement funds. If you’re worried about falling victim to a scam, here’s how to protect your pension in 2022.
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How to protect your retirement fund from pension scams
Modern technology has made it easier than ever for criminals to get their hands on your money. Unfortunately, this means that your hard-earned pension pot could be at risk!
Pensions are very attractive to scammers who look for individuals with substantial savings that could easily be manipulated into giving money away. In fact, according to the Financial Conduct Authority, scammers have taken £2 million from pension pots in the last five years! So, here are four ways to protect your savings and avoid pension scams.
1. Be aware of deals
One way that scammers may try to get hold of your money is by advertising a fantastic deal. For example, a scammer may try to tempt you with a promising business venture or property investment.
They use these deals to encourage you to release funds from your savings pot into your personal bank account. Most of the time, the deal will disappear once the money has left your account and the scammers will leave with your hard-earned cash.
The best way to avoid falling victim to this type of pension scam is to keep your funds in a reputable pension pot, rather than risking your money on investment schemes. If a deal seems too go to be true, it probably is!
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2. Avoid free services
A common pension scam tactic is to advertise free pension services online or through social media. Generally speaking, reliable pension services will charge a fee for their expertise. Therefore, it is best to avoid any free or incredibly cheap pension schemes. In the worst-case scenario, those who fall for the schemes can be tricked into handing over their funds to a scammer.
To keep your funds safe, always use an FCA-approved pension service to handle your funds. These companies have been regulated to ensure that your money is safe. You can use the FCA website to check whether a company is allowed to offer pension services and to access reliable companies through trusted links.
3. Ask for a second opinion
Before making any changes to your pension plans, you should get into the habit of asking for a second opinion. More often than not, a second pair of eyes will see through a scam better than you might be able to! This is because pension savers can easily become distracted by the fantastic promises and may not be able to see scams for what they truly are. If possible, seek professional financial advice before making any changes to your pension.
4. Always double-check
If you feel rushed into making any decisions about your pension, it could be a scam! Always take time to conduct research before making any final decisions. And double-check any facts or figures that you are given.
Scammers will often pressure you into rushing your decisions so that you don’t have time to find out the truth about their scheme. Meanwhile, legitimate companies understand that pension decisions are important, and they should give you all the time that you need to make your choice.
