Why Pension Savings Are Targeted
For many people, a pension is the largest sum they own after their home, and the whole of it can be moved to another scheme on a single instruction. Once it has gone to a fraudulent scheme, it is rarely recovered.
Offers usually arrive as a free pension review, a promise of higher returns from an overseas or specialist investment, or a way to release cash before retirement. Each of these can be tested against the law and the public record before any form is signed.
An Unexpected Call About Your Pension Is Unlawful
Since 9 January 2019, unsolicited calls about pensions have been banned. A caller may contact you only if it is authorised by the FCA, or is the trustee or manager of a pension scheme, and you have either agreed to be called or already have a relationship with the caller.
A call that offers to review a pension you never discussed with the caller therefore breaks the law before any offer is made. The safest response is to end the call and contact your own provider using the details on your annual statement.
Early Access Carries a Heavy Tax Charge
The minimum age for taking money from a personal pension is 55, rising to 57 from 6 April 2028. Outside narrow exceptions such as serious ill health, money taken earlier is an unauthorised payment, and HMRC can charge tax of up to 55% of the amount taken.
Fees charged by whoever arranged the release are deducted on top of that charge. An offer to release a pension early, whether described as a loan, a cashback or a legal loophole, should be refused.
Your Provider Must Check Every Transfer
Since 30 November 2021, pension providers have been required to look for warning signs before they transfer money out. A red flag stops the transfer: examples include a request that followed a cold call, advice from an adviser who is not regulated, or a payment or gift offered for moving the pension.
An amber flag means you must attend a free safeguarding guidance appointment with MoneyHelper before the transfer can proceed. A firm that asks you to complain about these checks, or to hurry past them, is asking you to set aside a check designed for exactly this situation.
Check the Adviser, the Scheme and the Account
Advice to transfer out of a defined benefit pension worth more than £30,000 must come from an adviser authorised by the FCA with permission for pension transfers. Search the FCA Register for the adviser's firm by its exact name, read its permissions, and contact the firm only through the details the Register holds.
Where you are asked to pay any fee or deposit, confirm through your bank's Confirmation of Payee check that the receiving account is held in the firm's own name before the payment is made.
How MetaAshes Examines This
A MetaAshes assessment cross-references a firm's details against the official record in a single pass. For this question, the most relevant checks include:
- Authorisation status
- Scope of regulatory permissions
- FCA Warning List screening
- Official telephone number on record
- Method of first contact
- Promised returns
- Pressure and deadlines
- Payee name verification
Frequently Asked
Is it ever legal to be cold-called about my pension?
Only where the caller is authorised by the FCA, or is the trustee or manager of a pension scheme, and you have agreed to be called or already have a relationship with the caller. Any other unsolicited call about your pension breaks the ban that took effect on 9 January 2019.
Can I take money from my pension before the age of 55?
In most cases you cannot. Apart from narrow exceptions such as serious ill health, money taken before the minimum pension age is an unauthorised payment and can be taxed at up to 55%. The minimum age rises to 57 from 6 April 2028.
Can MetaAshes check a pension offer?
Yes. An assessment reads the FCA Register for the firm's authorisation and permissions, the FCA Warning List, the firm's contact details and the payment details you were given, and reports where those details do not agree.
This guide is provided for general information and does not constitute financial or legal advice.