How to Avoid Pension Scams

Published: July 2018
Retirement - an image of the London UK Underground platform, used to signify the gap in the market when it comes to independent financial advice

Each year, people lose an estimated £10 billion due to fraud in the UK, and according to Age UK, nearly 5 million people ver the age of 65 believe that they have been the target of scammers. A higher proportion of older people fall victim to certain kinds of scams in the country, with 75 being the average age of a victim of mass marketing postal fraud, with an estimated £43 million lost to pension scammers since April 2014.

Clearly, the impact can be considerable in terms of both health and finances, but what can people do to make themselves less likely to become a victim of pension scams? We take a look at the things you need to look out for.

What is a pension scam

There are a number of different types of pension scams that people can become victims of, and as a result of changes made in April 2015 meaning that there are more options available to people when it comes to being able to access pension pots.

This is something scammers are fully aware of, and therefore many pension fraud schemes involve trying to lure people with one off deal that are supposedly guaranteeing high returns to pensions. Or, they try to tempt victims through promises of a lump sum upfront.

Unfortunately, the minute that you have given over your pension or provided your pensions savings it is already too late, meaning that you could end up losing a lifetime’s savings in a matter of minutes.

How to spot a pension scam

There are a number of things that you should be looking out for so that you do not fall victim to pension fraud. Here are some of the warning signs.

  • Be aware of unsolicited phone calls from unregulated pension advisers or companies.

  • Some scammers may try to pose as financial advisers as a way of luring you into a false sense of security that they are legitimate. For both the points above this is why it is vital that you always check beforehand if the company in question is registered on the Financial Services Register on the Financial Conduct Authority website at

  • Approaches regarding your pension fund through other means, such as by text or email

  • Being put under pressure to sign up quickly? It is common for scammers to try to lure you in with ‘time limited offers’ so that you hand over your money

  • Anyone claiming to know how you can get extra tax savings from your pension or say that they know of tax loopholes

  • Be very wary of any exotic sounding or overseas investments e.g. investments in hotels or vineyards etc

  • Any promise or statement of a guaranteed returns on your pension fund / investment

  • Another sign to look out for when it comes to pension scams is when it isn’t possible to call back the company in question

  • Any company claiming to be able to offer ‘pension liberation’ or ‘pension loans’? This is when a company claims that it is possible to unlock a pension before reaching age 55. This is one of the most common forms of pension fraud. It is only in extremely rare cases, such as someone being in bad health that enables a person to unlock their pension early

  • Companies offering very high rates of return on an investment and claiming that it is still low risk

  • Companies pretending that they are from a government backed organisation, through using a name that implies they are part of the government service Pension Wise. It is important to note that this service will never contact you without warning to provide you with an unsolicited pension review. For further information visit

What can I do if I think I’ve been targeted?

If you are concerned after reading our guide on signs to look out for when it comes to pension scams, or you think that you may have signed up to a scheme that may not be legitimate, you should make it your number one priority to immediately contact your pension provider. It may well be possible for them to prevent the transfer from going through. You should then contact Action Fraud on 0300 123 2040 to report this company immediately.

If you are unsure about what to do next, you can ring for impartial advice from The Pensions Advisory Service who can provide you with advice and guidance as to what you can do next.

You can also check out there website for free pensions advice. Furthermore, the service also provides support for its members who have already been a victim of a pension scam, and helps them to figure out ways that they can gradually build up there pension savings again.

NOTES & DISCLAIMERS: This article was published early July 2018

Note 1: This article has been reviewed and signed off by the IMFP Compliance function for S21 Promotion purposes. The source references, fact checks and the compliance review process and material are available upon request.

Note 2: All published information is based on the regulation and/or market information available at the time of drafting, review and publication. Over time, elements of the article may become outdated, irrelevant or factually incorrect. Always ensure that before you implement any decisions or actions that you review with a qualified adviser and double check the latest information and regulations pertaining to your exact financial and factual circumstances.

Other news...

Transferring a Pension to a SIPP

Published: September 2018

There are a variety of reasons for transferring a pension to a SIPP, also known as a Self-Invested Personal Pension. Understanding why to move is important.

Read More

How to Avoid Pension Scams

Published: July 2018

Knowing how to avoid pension scams is important when looking at your options to help you avoid being caught out when seeking out pensions for your future.

Read More

How to Save for Life Investments

Published: 28/06/2018

Making savings through a life investment can also provide peace of mind for years to come.

Read More

Are Pensions Taxable?

Published: 28/06/2018

Understanding taxation with regards to pensions allows you to make informed decisions.

Read More

The financial planning advice gap

Published: 19/02/2018

Here we explore what the financial advice gap is, where it came from and how we’re working to bridge it.

Read More