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Pension scams

More about pension liberation fraud and safeguarding vulnerable adults

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Pension and investments fraud

Pension liberation fraud

Pension liberation also known as 'pension loans' and 'pension scams', is the transfer of pension savings to an arrangement allowing you access to your funds before the age of 55.

Pension Liberation

In rare cases, such as terminal illness, it's possible to access funds before age 55 from a pension scheme. But most of the time, promises of early cash are false and likely to result in serious tax penalties.

When pension liberation becomes fraud

Pension liberation can be illegal. The victims are often misled about the fees, penalties or income tax they’ll have to pay. These hidden costs can be more than half of the value of the pension plan.

Pension liberation can mean tax charges and penalties of more than half the value of a person's pension savings, and those targeted are usually not told about this.

How you could be targeted

Companies sometimes target savers claiming they can help them take their pension cash early. This may be through websites, mass texting or cold calls. Be very cautious about giving out information in response to a text or cold call. Make sure you know who you're dealing with.

Vulnerable adults

A report by The City of London Police revealed how vulnerable adults are being exploited by so called friends and family, small-time fraudsters and organised criminals, with losses from a few pounds up to millions of pounds.

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Fraudsters selling fake share deals, known as boiler room fraud, land banking or operating lottery scams are increasingly targeting people with access to products like we provide at LV=.

A vulnerable adult is someone who is or may be:

  • in need of community care services, by reason of mental or other disability, age of illness
  • unable to take care of themselves
  • unable to protect themselves against significant harm or exploitation

People can also be vulnerable if they haven't had experience of financial matters, like investments, pensions and share-dealing. Criminals often target these people and take advantage of them.

If you know or suspect a vulnerable person is being financially abused, you should report it to police or social services.

Pension and investment scams

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Pension and investment scams are often difficult to spot as they're designed to look genuine. People who operate investment scams use sophisticated techniques to build trust and convince even the most experienced investors out of their savings.

How do the scams work?

We are aware that people are being contacted unexpectedly for a ‘free pension review’. It could be a phone call, an email, text message or an offer in an online advert.

While these offers appear to be legitimate, most of the firms and individuals involved in these offers are not authorised or regulated by the Financial Conduct Authority.

Pension Wise never cold calls

If someone cold calls you saying they are calling from Pension Wise, you can be assured that they are a fraudster, and only looking to add legitimacy to what they are trying to do - get their hands on your pension pot.

What are the risks?

If the 'investment opportunity' is a scam, you stand to lose all of the money that you have invested.

If there is an actual investment, your pension pot is typically invested in unusual, high risk investments such as overseas property, forestry, storage units, care homes, biofuels and therefore there is a significant risk that you would lose some or all of your investment.

It might also be difficult to sell any investments to get any of your money back.

In either case, it is likely that the funds you had earmarked to provide for your needs during your retirement will be significantly reduced and possibly lost completely.

In addition, if things go wrong you will not be able to complain to the Financial Ombudsman Service or claim against any compensation schemes as the firms and individuals involved in these scams are not authorised and regulated by the Financial Conduct Authority.

Remember, if an investment opportunity sounds too good to be true then it usually is.

How can I protect myself and my investments?

  • The Pensions Advisory Service (TPAS, an independent organisation supported by the Department for Work and Pensions) provided the industry with a tool to allow people to self-serve and to allow people too embarrassed to raise their questions and concerns with their pension provider and to go online and get some guidance in relation to next steps.

The tool can be found on the Pensions Advisory Service.

  • The Pensions Regulator (TPE, UK regulator of work-based pension schemes). also launched a campaign which provides individuals with information about how they can protect themselves from scammers, this can be found on their website.
  • If you need investment advice, then you should go to an adviser that is authorised and registered by the Financial Conduct Authority.
  • If you need help in finding a regulated adviser then please visit www.unbiased.co.uk where you will be able to search for an authorised and regulated adviser near you.
  • If you have any concerns in respect of any unsolicited contact about your pension, please call the LV= Financial Crime Department on 0800 633 5760.

Do you suspect fraud?

If you're worried that you may be suspecting fraud, and you have an LV= policy, contact us on:

0800 633 5760

Or alternatively, you can email us.

If you don't have an LV= policy, you can report your suspicions to Cheat Line on: 0800 633 5760.

Insurance Fraud Bureau - CheatLine logo

Cyber aware

Being a victim of a cyber-attack has many implications, so staying secure online is essential to protecting your personal identity and finances.

Cyberaware

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How to avoid becoming a victim of financial crime

While financial crimes comes in many different forms, it's important to protect yourself as best you can. To make sure you don't get caught out, you need to be prepared to spot the signs of fraud and cyber-crime to keep you and your money safe.