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Unfortunately, pension scams are on the rise in the UK.  In some cases, the scammer will try to persuade you to transfer your pension to a different scheme, often a scheme the scammer has set up themselves.

Falling victim to a pension scam could mean that you lose some or all of your pension savings.

Since the cold-call ban was introduced in 2019 scammers tactics have evolved. They are targeting people searching for investments online and through social media. They make attractive-sounding promises they have no intention of keeping. Tactics they use include: phrases such as “free pension review,” “one off investment” and “loophole”

What we will do to protect you from pension scams

The Government has identified common pension scam risks associated with transfers which, if present, may suggest you are in danger of being scammed. The Government calls these red and amber flags.

If you elect to transfer, to help protect your pension from scammers, the Government requires us to decide whether any red or amber flags are present. We will not need to do this if you transfer to a different public service pension scheme, an authorised master trust scheme or an authorised collective defined contribution scheme.

Red flags

Examples of when a red flag is present are:

  • you request a transfer to an occupational pension scheme and we do not have enough information to link you with an employer that participates in that scheme
  • you request a transfer to an overseas scheme and, we either do not have enough information to link you with an employer that participates in that scheme, or prove that you are resident in the country the scheme is based in
  • someone has provided, or agreed to provide, you with advice about your transfer and they do not have the necessary permissions from the Financial Conduct Authority to do this
  • you request a transfer following direct marketing, such as cold calling, texts and emails about your pension, by a person or firm that you have previously had no contact with
  • you have been offered an incentive to transfer such as, but not limited to, a bonus, a loan from your pension savings, access to your pension savings before age 55 or limited time investment offers
  • you feel you have been pressured to transfer.

If we decide there are any red flags present, we must stop the transfer. If this happens, we will let you know in writing within seven working days of our decision.

Amber flags

Examples of when an amber flag is present are:

  • information about the receiving scheme indicates:
  • the scheme invests in high-risk or unregulated investments
  • the investment structure is unclear, complex or unorthodox
  • overseas investments are included
  • there are unclear or high scheme charges
  • our records show that there is a sharp or unusual rise in transfers to the receiving scheme or involving the same adviser.

If we decide there are any amber flags present, we must pause the transfer until you provide us with evidence that you have attended an appointment about pension scams with MoneyHelper. MoneyHelper offers free, impartial guidance backed by Government on money and pension choices. The appointment will help you identify the common risks involved in transfers, highlight the dangers of pension scams and help you consider whether you still wish to transfer.

More information is available through The Pension Regulator who have produced a leaflet on avoiding pension scams.

Before transferring pension savings we would recommend you visit the ScamSmart website to check the firm you are dealing with is regulated and whether what you’re being offered is a known scam or has the signs of a scam.

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