Barbara from Surrey

‘I read a story saying cold-calling for pensions is now banned, but on the same day I was contacted by someone out of the blue asking about my pension. Does this mean it’s likely to be a legitimate investment?’

Absolutely not. As you rightly say, a long-awaited ban on pensions cold-calling came into force on 9 January. This intervention will help in deterring scammers – who could face a fine of up to £500,000 if they breach the ban – while also raising awareness of the tactics commonly used by fraudsters.

If someone you don’t know calls you out of the blue about your retirement fund, hang up the phone immediately.

Unfortunately the cold-calling ban will only put a dent in scammers’ activities rather than stopping them altogether. Some will simply flout the ban (unsurprisingly fraudsters often don’t care much for what the law says) while others will set up call centres overseas where the legislation doesn’t apply.

You shouldn’t consider the introduction of the ban as a guarantee any call you receive is from a legitimate company.

Furthermore, text messages, emails and internet posts are not explicitly covered by the ban, although there are separate regulations restricting unsolicited direct marketing.

The best way to ensure you don’t get caught out is to familiarise yourself with some of the common warning signs of a possible scam.

You should be extremely wary of any investment ‘opportunities’ that promise eye-watering guaranteed returns or people claiming to be ‘advisers’ offering a ‘free pension review’.

Professional advice is never free and so following the old maxim ‘if it sounds too good to be true, it probably is’ is a sensible approach.

It’s also a good idea to make sure you know with whom you are dealing. After all, your pension could be the most valuable asset you own, so don’t hand it over to someone unless you know their credentials check out.

Slick fraudsters will sometimes pretend to be a bona fide company when in fact they are nothing of the sort, so have a look at the FCA register to see if the firm you are dealing with actually exists.

And whatever happens, don’t be rushed or pressured into making a decision – such tactics should set off a big red warning light in your mind and are often indicative of a scam.

Finally, if you’re at all unsure speak to a qualified, regulated financial adviser. You will need to pay for this but usually the benefit far outweighs the cost.

DO YOU HAVE A QUESTION ON RETIREMENT ISSUES?

Send an email to editorial@sharesmagazine.co.uk with the words ‘Retirement question’ in the subject line. We’ll do our best to respond in a future edition of Shares.

Please note, we only provide guidance and we do not provide financial advice. If you’re unsure please consult a suitably qualified financial adviser. We cannot comment on individual investment portfolios.

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