I’ve had an email from my bank saying that I should take my money out of my pension fund and put it into their dedicated scheme for preferential customers. They say the scheme invests in gold and other commodities and so is more secure than my pension scheme and will grow faster. I’m age 49 and my scheme is currently worth £65,000. It hardly grew in the past year, so would it be good to move it?
Phil Beck of Smith & Pinching responds:
Please do not withdraw your money from your pension fund! This sounds to me like it may be a pension scam – with criminals aiming to steal your money by pretending to be emailing from your bank. Fraudsters these days are becoming increasingly sophisticated, using email addresses and logos that pretend to be from places you trust such as your bank or the tax office.
The fact is that you cannot take money out of a UK pension scheme until you are aged at least 55 – and it goes up to age 57 in 2028 – without incurring a tax punitive charge.
It’s important to remember that if something sounds too good to be true, it probably is. Abnormal growth may sound attractive but there will almost always be a catch. Gold and commodities may sound attractive, but I suspect what you would actually be buying is thin air…
There are hard and fast rules for avoiding financial scams. Firstly, never click on links in an email or phone the number they give you. Delete any unsolicited mail. If you want to check the authenticity of something, find a phone number or contact form online using a web address on genuine correspondence or via a Google search. If it’s your bank, log on in your usual way and check any messages there. Importantly, you should never give your PIN to anyone or pay anyone without checking that they are genuine. In addition, don’t give in to any time pressure put on you – it’s a classic sign of a scam.
If you want to look at the performance and growth of your pension scheme, I suggest you get independent financial advice from a firm that is authorised by the Financial Conduct Authority (FCA) and listed on its website. You can search the FCA Register at register.fca.org.uk. It may be possible to improve the rate at which your fund is growing, but not via a “get rich quick” scheme that will inevitably make you poor – not rich.
Any opinions expressed in this article do not constitute advice. The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.
For more information, please visit www.smith-pinching.co.uk
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