29/09/2020 Pension Scams

Don’t let a scammer enjoy your retirement – find out how pension scams work, how to avoid them and what to do if you suspect a scam.

How pension scams work

Scammers usually contact people out of the blue via phone, email or text, or even advertise online. Or they may be introduced to you by a friend or family member who is also unknowingly being scammed.

Scammers will make false claims to gain your trust. For example:

  • claiming they are authorised by the FCA or that they don’t have to be FCA authorised because they aren’t providing the advice themselves
  • claiming to be acting on the behalf of the FCA or the government service Pension Wise

Scammers design attractive offers to persuade you to transfer your pension pot to them (or to release funds from it). It is then often:

  • invested in unusual and high-risk investments like overseas property, renewable energy bonds, forestry, storage units
  • invested in more conventional products but within an unnecessarily complex structure which hides multiple fees and high charges
  • stolen outright

Coronavirus and your pension

Scammers are continuing to target pension pots of all sizes during the coronavirus (Covid-19) outbreak. Before making a decision on your pension, read below to find out how to protect yourself from scams.

The coronavirus pandemic has impacted on all kinds of companies to a varying degree, including those listed on the stock market. As a result, markets have been volatile and are likely to remain so for a while. This can have an impact on pensions, and lead to an increase in scams.

If you’re facing financial difficulties because of coronavirus, you may be tempted to cash in some of your pension. This isn’t usually possible before the age of 55, except in cases of ill-health or where you have a protected retirement age that is below 55.

Four simple steps to protect yourself from pension scams

Step 1 – Reject unexpected offers
If you’re contacted out of the blue about a pension opportunity, chances are it’s high risk or a scam.

If you get a cold call about your pension, the safest thing to do is to hang up - it’s illegal and probably a scam. Report pension cold calls to the Information Commissioner’s Office (ICO).

Be wary if you’re contacted about any financial product or opportunity and they mention using your pension.

If you get unsolicited offers via email or text, you should simply ignore them. Fortunately, most people do reject unsolicited offers – our research suggests that 95% of unexpected pension offers are rejected.

Be wary of offers of free pension reviews. Professional advice on pensions is not free. A free offer out of the blue (from a company you have not dealt with before) is probably a scam.

Don't be talked into something by someone you know, even a friend or family member. They could be getting scammed. Check everything yourself.

Step 2 – Check who you're dealing with

Check our Financial Services Register to make sure that anyone offering you advice or other financial services is FCA authorised, and that they are permitted to provide you with those services.

If you need any help checking, call our Consumer Helpline on 0800 111 6768.

Make sure the firm you are dealing with is not a clone – a common scam is to pretend to be a genuine FCA-authorised firm (called a ‘clone firm’). Always use the contact details on the Financial Services Register, not the details the firm gives you.

Step 3 – Don't be rushed or pressured

Take your time to make all the checks you need – even if this means turning down an ‘amazing deal’. Be wary of promised returns that sound too good to be true and don’t be rushed or pressured into making a decision.

Step 4 – Get impartial information or advice

You should seriously consider seeking financial guidance or advice before changing your pension arrangements.

  • The Pensions Advisory Service provides free independent and impartial information and guidance.
  • If you’re over 50 and have a defined contribution pension, Pension Wise offers pre-booked appointments to talk through your retirement options.

You can also use a financial adviser to help you make the best decision for your own personal circumstances. If you do opt for an adviser, make sure they are regulated by the FCA and never take investment advice from the company that contacted you, as this may be part of the scam. Find out more about getting financial advice.


If you have already agreed to transfer your money and now suspect a scam, please contact us straight away on 01642 030693 or email and mark Urgent [email protected].

You should also report this to Action Fraud online or by calling 0300 123 2040.