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14-17_ARENA_SUMMER2015_Arena_A5 20/05/2015 11:32 Page 2 • PENSION SCAMS • KNOW YOUR RIGHTS • PENSION SCAMS • KNOW YOU eware: Pension B a c s mmers at work es who Don’t be fooled by professional looking compani turn 55 promise to ‘release’ your cash before you Intro It looks ‘legit’ Pensions have been in the news more lately than they have in decades. With massive changes announced by the last Government fraudsters are also busy trying their luck to rob you of your hard-earned money. Q Transfer request Q Have you been encouraged to transfer your pension pot? Fraudsters want to persuade you to access your pension pot before you reach 55. Why? Because it provides them with rich pickings. But be under no illusion this is a pension scam and with very serious consequences if you fall for it. If you do fall victim, it’s likely that you could lose some, but more than likely all of your pension savings and will potentially face a huge tax bill from HMRC. So to repeat: A pension scam is when you agree to transfer your pension savings to another company who claim that this will allow you to access your funds before you reach the age of 55. In rare cases – such as terminal illness – it’s possible to access your pension pot before the age of 55. However, for most people, promises of early cash are false. Members of defined contribution schemes can now take more than 25 per cent of their pension savings as a cash lump sum (subject to tax) after age 55 following changes introduced this April but, to repeat, not before age 55. 14 arena How do seemingly respectable companies do it? Don’t be fooled, fraudsters go to a lot of trouble to look ‘respectable’ and produce glossy brochures or glitzy websites or use persuasive cold-callers. Contact is often out of the blue; a text or cold call, sometimes via websites. We’ve seen recently in the news how people’s private pension information is being made available via the internet. You will be invited to transfer your pension pot to the company with various promises being made. These could include: n Guaranteed returns of eight per cent on your savings. n Immediate access to your cash. n The offer of non-repayable loans. They will suggest that you don’t have to wait until you’re 55, and claim you can access your pension pot now.