MTTM Podcast Episode 505 – Pension transfer tips, 10 common credit myths & SIM swap fraud

Listen to Episode 505

In this week's episode I take an in-depth look at pension transfers. I provide a list of pros and cons, share the latest research on how long pension transfers take with different providers and finish up with a guide on how the pension transfer process works. Next, I debunk 10 common credit myths, addressing misconceptions about credit scores, debt management and the impact of making various financial decision. Finally, Andy highlights the alarming rise of SIM swap fraud, explaining how it works, the risks of compromised two-factor authentication and the essential steps you can take to avoid becoming a victim.

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Episode 505 Podcast Summary

Navigating Pension Transfers: Pros, Cons & Timelines

Summary

I outline the significant advantages of a pension transfer. These include potentially lower costs, being able to consolidate multiple pots for easier management and consistent investment strategy and access to a much wider range of investment options. I also cover the cons and these include the potential loss of valuable benefits (especially with defined benefit schemes), possible exit fees (though now capped or banned in many cases), and market movement risk when out of the market. I also take a look at a recent report from PensionBee which highlights the wide disparity in transfer times between providers, with some taking just days (like J.P. Morgan Personal Investing at 4.8 days) while others can take over 50 days. I also provide a quick guide on how to initiate a transfer and highlight the importance of considering financial advice.

Key Insights:

• Transfer Benefits vs Risks: Moving your pension can lead to lower fees, better investment choice and consolidation, but always weigh this against potential loss of valuable benefits (especially for defined benefit schemes) and market risk during the transfer.
• Provider Transfer Times Vary Hugely: Research reveals some providers like J.P. Morgan Personal Investing (4.8 days) and Aviva (5.1 days) are very quick, while others like Mercer (34.7 days) or Virgin (41.3 days) can take over a month. The legal limit is six months.
• Consider In-Specie Transfers & Advice: If concerned about being out of the market, ask about in-specie transfers. Always consider financial advice if you're unsure, especially for significant amounts or complex situations

Debunking 10 Common Credit Myths

Summary

I tackle 10 prevalent myths surrounding credit scores and reports. Did you know that checking your own credit report (soft search) doesn't harm your score? Also, closing old credit cards can sometimes be detrimental as it reduces your available credit and credit history length. Other myths that I was able to dispel was the idea that paying off a default erases its record immediately (it doesn't, it can stay for up to six years). Finally, I reveal that contacting debt charities won't hurt your score, so make sure you get the available help if you are struggling to repay your debt on time.

Key Insights:

• Your Actions, Your Credit: Regularly checking your own credit report (soft search) is harmless. Closing old accounts can negatively impact your credit utilisation and history.
• Every Payment Counts & Defaults Can Linger: Even small missed payments can be reported and affect your score. A paid default will still appear on your report for up to six years.
• No Blacklist, Seek Help: There's no universal credit blacklist; lending decisions are specific to each lender. Contacting a debt help charity does not negatively impact your credit score and can be very beneficial

SIM Swap Fraud: Understanding the Threat & Protecting Yourself

Andy concludes the podcast by highlighting a scam known as SIM swapping. He explains how scammers convince mobile providers to transfer a victim's phone number to a new SIM card controlled by the fraudster. This gives them access to calls and, crucially, text messages often used for two-factor authentication, enabling them to potentially access bank accounts, emails, and social media, and even open new lines of credit in the victim's name. Andy finishes by listing the warning signs to be aware of, such as sudden loss of phone service and what steps to take if you suspect you've become a victim.

Key Insights:

• The Danger of SIM Swaps: Scammers hijack your phone number to intercept calls and texts, especially two-factor authentication codes, to access sensitive accounts like banking and email.
• Proactive Protection is Key: Guard personal information, set up extra security (like a PIN) with your mobile provider for account changes, use authentication apps over SMS for 2FA, and ensure strong, unique passwords for all accounts.
• Recognise Warning Signs & Act Fast: Sudden, unexplained loss of mobile service can be a red flag. If you suspect fraud, immediately contact your mobile provider (from a different phone if necessary) and your bank, then change critical passwords

Episode quiz 

1. According to PensionBee's research, which pension provider was mentioned as having one of the fastest average transfer times, at around 4.8 days?
a) Vanguard
b) J.P. Morgan Personal Investing
c) Mercer
d) Scottish Widows

2. What is the legal limit for how long a pension transfer should take, after which the provider must explain any delays?
a) 30 days
b) 60 days
c) 3 months
d) 6 months

3. What is an "in-specie" transfer?
a) A transfer where your money is moved as cash to the new provider
b) A transfer that is guaranteed to be completed within 7 days
c) A transfer where your actual investments are moved directly without being sold
d) A special type of transfer only available for defined benefit pensions

4. Which common myth about contacting a debt help was debunked in the podcast?
a) They charge very high fees for their services
b) Contacting them will negatively hurt your credit report or score
c) They can only help if you are already bankrupt
d) They are not regulated and therefore unsafe to use

5. What is SIM swap fraud?
a) A fraudster deceives your mobile network provider into activating your phone number on a SIM card they control
b) A scammer illicitly obtains a duplicate of your existing SIM card without deactivating your original one
c) A victim unknowingly downloads malicious software by swapping infected files with another user
d) An individual physically swaps their phone's SIM card for a counterfeit one that compromises their device

Answers

1. b) J.P. Morgan Personal Investing
2. d) 6 months
3. c) A transfer where your actual investments are moved directly without being sold
4. b) Contacting them will negatively hurt your credit report or score
5. a) A fraudster deceives your mobile network provider into activating your phone number on a SIM card they control

Resources

Links referred to in the podcast:

• Pension Transfer Offers
• Best Pension in the UK
• How to transfer your pension - everything you need to know
• How to find a good financial adviser you can trust
• Take out a free trial of 80 20 investor

 

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