We work all our lives to build up a pension, so we want to make sure that we’re doing everything we can to protect it. Unfortunately, wherever there is money there are scams, from crypto scams to romance scams, and people take advantage of people with pensions, and financial institutions can also go bust. So, we’re here with 3 steps you should take to help make sure you protect your pension and the money you’ve worked hard to earn.
Have More Than One Pension Pot
The first thing you should do is make sure you have more than one pension pot. Whilst you benefit from better interest when your pension fund is all in one place, if the institution that your pension is held in goes bust, the FSCS (financial services compensation scheme) only protects up to £85,000 per person per institution. So, if you have much more money than that within one of your investments, if the company folded, then you could potentially lose a lot of money.
So, looking for ways to diversify your pension is advised, for example having some in stocks, real estate, commodities and then traditional savings accounts. The majority of your pension should be in safe investments, then you could utilise some of it on slightly higher risk investment opportunities, if it’s money you can afford to lose should the worst happen.
Make Sure It’s FSCS Protected
Next, whether you’ve already got a pension or you’re looking to set one up, it’s absolutely essential that the institution you choose is FSCS protected. As highlighted above, this is the UK’s financial services compensation scheme, designed to help people who have lost money when a financial institution goes into administration and liquidates. This system protects up to £85,000 per person per institution, and without it, you could lose all of the money. So, it’s so important that you thoroughly check that you have the FSCS protection. You can check this on the website to see whether the institution is a UK authorised bank with the right protection.
Be Aware Of Common Types of Pension Fraud
You should also be very aware of common types of pension fraud. It’s very common for pensions to be targeted when it comes to scams, so if anyone approaches you over the phone, over email or social media with pension investment opportunities that can increase your pension, or by someone posing as an advisor, you must completely ignore them and not engage. Legitimate pension brokers won’t be doing cold advertising and approaching people, so you should not communicate with these people in any way, give away any information and certainly not transfer any money to them.
It can be tempting when people approach you with offers to make more money that seem fantastic, and sometimes they may even just request a small payment and then give you a high return, then once the trust has been built, you send more and then never see the money again. So, educate yourself on common pension scams to help protect your money. If you do get scammed, contact your bank and also investment fraud lawyers who may be able to help recover the lost money.