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Beware of pension scams

Scammers can be articulate and financially knowledgeable, with credible websites, testimonials and materials that are hard to distinguish from the real thing.

Scammers design attractive offers to persuade you to transfer your pension pot to them or to release funds from it. It is then invested in unusual and high-risk investments like overseas property, renewable energy bonds, forestry, storage units, or simply stolen outright.

Did you know? In June Scottish Widows signed up to The Pension Regulators pledge to combat pension scams and they continue to invest in their Award-winning Customer Vulnerability Strategy and training for their colleagues.

Four simple steps to avoid pension scams!

Step 1 - Reject unexpected offers

Be wary if you’re contacted by phone, email or text about any financial product or a free pension review or pension opportunity. The safest thing to do is hang up or ignore them.

Step 2 - Check who you’re dealing with

Check the Financial Services Register to make sure that anyone offering you advice or other financial services is FCA authorised, and that they are permitted to provide you with those services. If you need any help checking, call the Consumer Helpline on 0800 111 6768 or log on to www.fca.org.uk/scamsmart/how-avoid-pension-scams.

Step 3 - Don’t be rushed or pressured

Take your time to make all the checks you need – even if this means turning down an ‘amazing deal’. Be wary of promised returns that sound too good to be true and don’t be rushed or pressured into making a decision.

Step 4 - Get impartial information and advice

You should seriously consider seeking financial guidance or advice before changing your pension arrangements.

  • MoneyHelper provides free independent and impartial information and guidance.
  • If you’re over 50 and have a defined contribution pension, Pension Wise offers pre-booked appointments to talk through your retirement options.

The Normal Minimum Pension Age is increasing to 57

The normal minimum pension age (NMPA) is the earliest age at which people can withdraw their private pension without incurring an unauthorised payments tax charge, unless they are retiring due to ill health, or have a Protected Pension Age (PPA).

Increased from age 50 in 2010, the NMPA is currently 55, although there are exceptions.

The Government has confirmed plans to increase the NMPA to age 57 from 6th April 2028, to maintain the 10 year gap between the State Pension Age. Draft legislation was issued in July and we now have a clearer understanding of how the change will be implemented.

However, questions still remain and the Government still needs to issue further guidance on some points which require further clarification. Below is a summary of the position as it stands at the moment:

  • The change will apply from 6 April 2028 at the latest, but schemes can implement it earlier.
  • Some schemes may provide an actual or prospective unqualified right under the scheme rules to benefit from an age less than 57. As such, members of these schemes may still be able to access their pension benefits before the age of 57, even after 6 April 2028. This will depend on whether the scheme rules allowed this right on 11 February 2021.
  • Scottish Widows along with other pension providers, will be determining if any of the pension arrangements they provide have an unqualified right to allow members to access their pension benefits before the age of 57. Once Scottish Widows have confirmed their position, we will update you.