
Pension Scams - Don't get Stung!
In April 2015 new rules came into force enabling greater access to Personal Pension or ‘Money Pot’ Pension arrangements. This new flexibility has been seen as a golden opportunity by the unscrupulous to swindle pension policyholders out of their hard earned funds. Pension scams have increased dramatically over the past twelve months, so how can you ensure you don’t scammed?
There are a number of ways to spot bogus schemes and any one or more of the following should start the alarm bells ringing!
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Any claim that pension benefits can be accessed before age 55. Under normal circumstances and unless you are very ill, this is not allowed
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A recommendation to transfer your pension benefits overseas
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A cold call, text message, website pop‐up or someone coming to your door offering you a ‘one off investment opportunity’ or ‘legal loophole’
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Convincing marketing material promising substantial guaranteed returns on your investment
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A proposal to put all of your money in one investment (in most circumstances, financial advisers will suggest that your assets are diversified)
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Paperwork delivered to your door by courier that requires immediate signature
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Any paperwork naming you as a company director and trustee of the proposed pension scheme
So what can you do if you are age 55 or over?
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You can use your fund to buy a regular guaranteed income for life (an Annuity)
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You can use your pension fund to provide a flexible retirement income (flexi‐access drawdown)
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You can take your pension as cash in stages
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You can take the whole pot as cash in one go (be careful of how much income tax you will pay!)
And how should you go about it?
Before taking any action we would alwaysrecommend that you talk to a firm of Independent Financial Advisers who are authorised and regulated by the Financial Conduct Authority (FCA). You can do this by visiting www.unbiased.co.uk or easier still, by giving us a call at HDA on 01242 514563. Generic information is also available at www.pensionwise.gov.uk
There can be certain circumstances where accessing pension benefits before retirement is a good idea, but there are also numerous potential pitfalls and disadvantages for the unwary.
For further information Contact Us