Being offered a free pension assessment out of the blue might seem like a good deal. But, as with all things to do with your personal finances, you need to approach this with care.
While it is possible to get free, impartial guidance to help you understand what you can do with your pension pot, there are firms out there who don’t have your best interests at heart. Pension scams are rife in the UK and could leave you with nothing if you are tricked into signing away your investments.
So what do you need to be aware of if you’re offered a free pension assessment?
This guide looks at what you might want to know about your pension, who you can trust to offer you a free pension assessment and how to spot scams offering free pension assessments.
We update all our guides regularly. If you are researching pension fraud and we haven't got an exact guide that helps you, keep coming back as we update daily.
It’s only natural to want as much information as possible about your pension. You might want to know how much you’ll get once you’ve retired, how you can draw your pension and when it would be most cost and tax-effective for you to do so.
Generally speaking, this is information you’ll have to seek out yourself - not something that comes to you. Here are some places you can get free pension assessments.
There are a number of free pension calculators available online. These range from tools that calculate your likely retirement income given your current circumstances, to tools that help you decide how much money you’d need to save to comfortably retire at different ages.
Pension Wise is a free service provided by the government to help you understand your pension options. They can help you find out:
If you're over 50 and want to make sense of your pension, you can book a free appointment with a pension specialist through Pension Wise. They can then explain your pension options and the tax implications of each one.
The Pensions Advisory Service can also help you with free, impartial information about your pension, what you can do with it and try to answer any questions or concerns you have.
You should always get financial advice before making a decision about how and when to access your pension pot. You might be able to get information about your pension options from these free services, but they cannot offer you financial advice. For this, you will need to speak to a financial advisor - a service you will have to pay for in most circumstances.
If someone offers you a free pension assessment out of the blue, it is usually a scam. With such large amounts of money tied up in pensions, they're unfortunately a prime target for scammers. Offering free pension advice, reviews, or assessments is just one trick a scammer might use to swindle you out of your hard-earned cash.
So when we talk about free pension assessments, being mindful of pension scams is an important part of protecting your money. Here are some things to watch out for when trying to spot a pension scam.
Scammers will likely get in touch with you out of the blue - either by phone, email, text or by going door-to-door - and offer unsolicited advice about your pension that you didn't ask for.
While this might seem well-intentioned, this is a common way for scammers to gather your personal information. With this they might be able to transfer your pension into an account they can access or pass you over to another kind of pension scam - typically an investment scam which we'll touch on next.
So if you're called out of the blue to discuss your pension or are offered a free pension assessment, hang up. As of January 2019, cold-calling about pensions is illegal, and any firm attempting to do so are very likely to be scammers.
A liberation scam is a common tactic to get under 55s to cash in their pensions early. They might use words like 'pension liberation, 'pension loans' or 'early pension access' to tempt you. Be wary though, the scammer's aim is to get the funds transferred to an unauthorised account that they control - from here, your fate is completely in their hands. Many scammers pocket the cash then disappear or invest it all in incredibly high-risk investments.
If someone offers to help you access your pension funds before you turn 55, say no. This is generally not possible unless you’re seriously ill. You could lose all of your pension funds and be forced to pay a huge tax penalty for premature access too.
An investment scam is where scammers offer an unusual investment opportunity claiming it has a high return. These investments are often advertised as ‘one-offs’ or time-limited, and more often than not involve investing your entire pension pot in property or hotels overseas.
Other common high-risk investments that these scammers try to sell to you are renewable energy bonds, storage units or biofuels. The aim here is to get you to transfer your pension to the scammer, where they can then do what they like with your money.
If you’re offered any kind of one-off investment or you feel pressured into making a decision quickly, say no and report the company. Another common trick scammers use is to offer to send a courier to your door to get documents signed immediately.
If you think you’ve been a victim of a pension scam, speak up. The FCA’s ScamSmart website can be a good place to start for reporting scams. If you suspect you’ve lost money to a pension scam, contact Action Fraud and seek legal advice as soon as you can.
There is a saying in investment circles, if it looks too good to be true, then it usually is! If you are approached by an unknown third party offering free gifts, be sceptical. The first thing to ask yourself is, where did they get your details? Did you fill out any forms on the Internet and request a callback? Have they picked up your details from elsewhere, perhaps fraudulently or illegally?
When looking to protect your investments, it is important to take control of the advisers and the financial companies around you. Part of the overall process of investing in your pension scheme is trust. Trust in your advisers and trust in your investments so if unknown parties come bearing free gifts, be wary.
Yes. If the company in question is regulated, then they will need to abide by an array of regulations, one of which is a duty of care to clients/potential clients. If you believe they have failed to fulfil their duty of care, advising an inappropriate investments/transfer strategy, then you may well have a case for compensation. If the third party is unregulated, then this makes the situation a lot more difficult.
The details surrounding pension fund transfers and investments are complicated at the best of times. If potential scammers have looked to tie you up in knots and take advantage of your inexperience with pension funds, the chances are they will have made the situation even more complicated.
So, while there are regulatory routes down which you can go to claim compensation, it may be sensible to appoint a claims management company to represent your interests and pursue damages on your behalf.
In order to apply for any kind of financial damages/compensation, you will need to prove negligence on behalf of a rogue investment adviser in this particular scenario. It is essential that you maintain a strong paper trail when switching pensions/investing pension funds, especially when the advice appears to be out of the ordinary. This paper trail can come in very useful when pursuing compensation.
Once you have put together as much detail and evidence as possible, it is time to approach a claims management company. They will review your case and your evidence and then give you an independent assessment of your chances of success.
If they believe you have a minimum 60% chance of success, it is likely that they will apply to take on your case often on a “no win no fee” arrangement. This effectively means that you are indemnified from any costs the claims management company accumulates pursuing your case. In exchange, they will look to negotiate a “success fee” prior to pursuing your claim.
A success fee is simply a share of any compensation which will be allocated to the claims management company. This is in effect their reward/payment for a successful prosecution and on average tends to be around 25% of the compensation received. This figure is not set in stone, but in reality, individual case rates should not be too far from this figure.
Here at Money Savings Advice, we have partnered with some of the UK’s leading Financial Claims management companies. They have already helped thousands of people claim compensation for a mis-sold pension and they can do the same for you.
Choosing an independent claims management company means they won’t proceed with a claim unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these claim management companies who can help you make a compensation claim, then click on the below and answer the very simple questions.
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