Crime against older people has taken an even nastier turn. Now that pensions are more easily accessible, con-artists are scenting easy money. Fight back against the pension muggers with our self-defence tips. Article by Nick Green.

Okay, class! Listen up. You’ve spent your whole life saving up a pension for your retirement. But somewhere out there is a handful of low-lifes who want to take it from you, by deception and pressure-selling. How does that make you feel? That’s right. ANGRY.

Let’s channel that anger. Learn these chops and you can recognise pension fraudsters if they appear, then send them packing.

1. Did they call you?

If it’s a cold call, or a knock at your door, the chances are that someone’s out to exploit you. Legitimate advisers have no need to hawk around for trade. Your caller might claim to be from a government-backed service – they’re not. The really clever ones might say they’re returning your call, in the hope that you’ve recently phoned a legitimate service such as Pension Wise. Be absolutely clear whom you are talking to and ask for proof if necessary. As for doorstep sellers, just close the door.

2. Are couriers involved?

A notorious technique is to cold-call a potential victim, pressure them to sign up for a scheme, and then send round the papers to sign via a courier who does not know anything about the arrangement (and so cannot answer questions). Never sign anything you don’t fully understand or aren’t fully comfortable with. This usually means engaging an independent financial adviser to go through any paperwork in detail.

3. Have you been given a tight time limit?

Fraudsters know that an IFA could see through them in a second, so usually they won’t give you time to hire one – they might say that this offer expires tomorrow, so you have to get in quick. Don’t rush into a two-minute decision that could lead to years of financial ruin.

4. Do you understand the terminology?

Some fraudsters hide behind jargon – and a lot of terms which may sound similar are actually very different. For instance, pension unlocking is a perfectly legitimate activity for anyone over the age of 55 (though it is certainly not suitable for everyone). By contrast, pension liberation is the offer to access your pension pot before the age of 55. This is not only very unwise but illegal too (see below).

5. Is it legal?

If it sounds too good to be true, it’s probably too bad to be lawful. Anyone offering access to your pension before you reach 55 is asking you to break the law. Not only would you lose much of your savings to the fraudsters, you could also be prosecuted for the privilege.

6. Are all your eggs going in one basket?

A reputable financial adviser will almost always recommend diversifying your portfolio. Putting everything in a single investment is asking for trouble. Probably that ‘golden’ investment is actually desperate for your money, and would collapse with or without it. Make sure it’s without.

7. Does it sound convoluted?

Maybe this get-rich scheme involves transferring your money overseas, for instance. But you wouldn’t post even a hundred pounds in cash to an unknown foreign address, would you? So don’t do it with your life savings. Remember that genuine financial advice tends to be reassuringly straightforward – it’s not about tricks and loopholes.

8. Final tip: protect your data

It’s a sad fact that many organisations which ask for your personal data (e.g. name, date of birth, address etc) may sell this information to interested parties unless you explicitly tell them not to. Fears have been raised that fraudsters could use this information to try and gain access to people’s pension pots. Whenever you fill in a form (either paper or online), look for a box that you can tick to say you don’t want your data to be shared. Be aware that this question may be phrased back-to-front (so that by ticking the box, you actually give consent!) so read everything carefully.

It's worth a reminder at this point that Unbiased will never share your data with any third parties. The only other person who gets to see your data is the financial adviser (or other professional) whom we match with you.

Here's our friend Peter to summarise all these tips for you:

You should now be better protected against the pension muggers out there. For the best possible level of protection, you can engage your own pension bodyguard – in the form of an independent financial adviser.