Page 42 - Property Portfolio - September 2019

What to look out for

to protect your pensions

Pension transfers present a key opportunity
By Kelman Chambers, Partner, for scammers. ‘Defined benefit’ (‘final salary’)
Blevins Franks transfers can be particularly lucrative, as some
transfer values today are worth hundreds of
Since the 2015 pension freedoms, there has thousands of pounds. And, while expatriates can
been more choice than ever for how Britons can unlock tax, estate planning and currency benefits
access their retirement benefits. While this is by transferring UK pensions to a Qualifying
generally welcome, it has been accompanied by Recognised Overseas Pension Scheme (QROPS),
increasingly sophisticated pension fraud – and this is another target area for fraud.
even the financially savvy are being caught out.
There can be significant advantages in
Most people see pension scams as deliberate transferring UK pensions – especially if you
criminal efforts to steal pension funds from their are resident in Spain – but it is crucial to take
rightful owners. While this is correct, they can extreme care and seek regulated, personalised
also take the form of ‘mis-selling’ from advisers, advice before taking any action.
whereby pension holders are persuaded to
transfer retirement benefits into inappropriate Who is at risk?
and/or high-risk investments that could fail. If you think you are unlikely to be taken in by
a scam, think again. Joint research from the
Make sure you know how to spot the warning Financial Conduct Authority (FCA) and The
signs and protect your pension benefits without Pensions Regulator (TPR) discovered almost half
missing out on suitable opportunities. of pension holders (42%) could be persuaded
by the most common tactics. That means over 5
How common are pension scams? million people could potentially become targets.
Almost 3,750 victims reported losing on average
£82,000 each to pension scams last year – a They also found that people who considered
total of around £307 million. However, industry themselves financially savvy were just as likely as
insiders estimate that the real figure, including others to fall victim. Although people actively
unreported cases, is likely to be much higher. looking to boost their retirement income
were 60% more likely to succumb, anyone
The Pension Scams Industry Group found considering their pension options could be at
around one in eight pension transfers in 2018 risk.
was potentially fraudulent – which means
approximately £4 billion of UK pension funds What are the warning signs?
are at risk. Although pension cold calling was banned by

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