Often they will entice members of legitimate pension schemes to transfer their benefits to a new scheme by offering 'incentives' and 'loopholes' which in reality do not exist. For example, it is common for scammers to claim that they can 'unlock' pensions before age 55, or to offer 'guaranteed' investment returns. These claims are untrue.
Victims of these scams face hefty tax charges, or simply have their funds stolen. This is in addition to the extortionate fees levied by the scammers.
The perpetrators of pension scams often have professional looking websites and brochures. They may even claim to be acting on behalf of a legitimate organisation. This makes it even more important to remain vigilant.
There are resources available to help members protect themselves from pension scams. As a starting point we would urge all members to read the Pensions Regulator's guidance on pension scams.
They have helpful tips on steps you can take to protect yourself from the dangers of pension scams and the option of printing a short guide on what to look out for.
In addition the Financial Conduct Authority's website has a list of known scams as well as a register of approved financial advisors.