Staying safe from Brexit scams

With confusion around Brexit giving fraudsters more opportunities to scam customers, knowing what to look out for can help you to protect your pension pot

The issue of pension scams has received widespread attention but, despite this, millions are still being lost to fraudsters.

The issue was compounded by the introduction of the Pension Freedoms in 2015, which enable people to take their pension pots as a lump sum – a tempting prospect for fraudsters. And, more recently, with all the uncertainty surrounding Brexit and how it might impact people’s finances, fraudsters have jumped at the chance to trick more customers into investing in pension scams.

You can find out what Brexit means for Royal London members by visiting our website.

While the number of scams is growing, the likelihood is that their true scale is grossly underreported. Many people feel too ashamed to admit that they’ve been taken in by a scammer. This can cause a lot of anxiety, and it’s important these people know they’re not alone so they can report what’s happened and access the support they need.

What’s a pension scam?

Pension scams usually start with a call, text or letter offering either a free review of your pension arrangements or introducing some kind of high returning or even guaranteed investment.

The investments offered are usually based overseas and a quick decision needs to be made if the investment is to be taken advantage of.

What’s being done to stop pension scams?

The government has been looking at how it can tackle scams for some time.

• In January 2019, cold calls related to pensions were banned. Companies that break the rules could now face fines of up to £500,000.
  
• Rules are being tightened to stop fraudsters from opening pension schemes – but there’s no timetable for implementation as yet.
  
• There are several initiatives, such as the Financial Conduct Authority’s (FCA) ScamSmart campaign, aimed at raising awareness of scams.
  

What can you do to protect yourself?

There are several things you can do to help protect yourself and your finances from scammers.