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Scam watch: beware of ‘free’ pension reviews

phonetrap with scamwatch logo

The Financial Conduct Authority is warning of a new wave of pension scams. We speak to Tracey McDermott, Director of Enforcement and Financial Crime at the FCA for for details on this scam…

‘Here at the Financial Conduct Authority (FCA) we have evidence that people are being contacted unexpectedly via phone, email or text messaging, and offered a ‘free pension review’.

‘Many callers falsely claim they are acting on behalf of the FCA or the government. They will try to persuade you to move your pension funds to a self-invested personal pension (Sipp) or a small self-administered scheme (SSAS) in order to get better returns.

tracey-mcdermott-fca‘In reality, your pension pot is typically invested in high-risk unregulated investments, which provide unreliable returns and can be hard to sell. By complying with these cold callers, you could lose everything you’ve invested – significantly reducing your retirement income.’

Which?’s review on the scam

We believe your pension is far too important to leave in the hands of a cold caller who may not have your best interests in mind.

We would always strongly recommend seeking independent, impartial advice to help you decide what to do with your retirement funds – and it was recently confirmed in the Queen’s Speech that, from April 2015, everyone who retires with a defined-contribution pension will be offered free impartial guidance. So, unless you’re due to retire in the next year or so, it may be best to sit tight until then.

Sadly, it’s typical for new dodgy companies to appear whenever a significant change, such as the recent pension reforms, comes to an area of financial services. The pensions shake-up gives people more control over their retirement funds, but has also left many confused.


Always ignore the door to door Sales People, and seek advice before asking some person to call when you are at home and alone. If they are genuine, they will accept a delay of a few days whilst you check them out.

1 July 2014

…and further to Tony Walker’s sound advice, NEVER ever sign (commit to) anything until you have checked them out or give away your personal banking/financial/personal information eg N.I. number, date of birth, and so on! No matter HOW Genuine they may appear! They all mostly seem genuine and have a rapport with you…until the time you start asking (THE RIGHT!) Questions!!! Then the pressure-selling techniques come into play.. eg, “If you sign up to this plan right now, today- we can give you a BIG reduction or a BONUS, or some form of cash inducement!” Or, “This SPECIAL DEAL is valid ONLY for Today! – so Let’s go over those benefits AGAIN with you!”
ALWAYS consult a professional accountant you know for impartial advice, or speak to someone you know (friends, family, even your family solicitor) before signing up to anything sold you on the doorstep, in the comfort of your living room, or over the telephone- that’s when WE ARE at our most vulnerable- not thinking straight and without our partners or friends/family or an independent professional advisor to hand!