Could you be pension scammed?

With pension scamming on the rise, could it happen to you?

4 min read


You might have recently seen a campaign on TV led jointly by The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) to help warn people about pension scams. This activity is on the up and we need to know what it is and what we can do about it.

According to Action Fraud (the national fraud and cyber-crime reporting place), the TV campaign has come off the back of figures showing a total of 253 victims reported to Action Fraud that they had lost more than £23 million to pension scammers in 2017, which equates to an average loss of £91,000 per victim.

What is a pension scam?

A scam is essentially a dishonest scheme used to commit fraud. Usually, the scammer is aiming to get their hands on your money. In this case, this could be your life savings or pension pot. The scammer will attempt to gain your trust and drive your decision to commit your pension pot to their fictitious offer. Once the scammer has received your money, they will often then invest this money into high-risk investments or simply make off with it!

How to identify a pension scam

Con-men and scammers can be very clever in how they target us. It is so important that we understand how to spot a potential scam. It is a sad reality that scammers often can and will talk to the talk, often using financial lingo, customer testimonials and product brochures portraying a picture of credibility and reputation.

However, there are a few big red flags that we can watch out for which will help us identify a potential scammer;

  • Unsolicited calls – Scammers can contact you out of the blue, usually by telephone.
  • Random scam email – Email is another avenue a scammer may try. Be aware that the email addresses may be slightly mis-spelt reputable business or company. They may claim to be FCA authorised.
  • Inflated promises of high returns – Scammers will often try to impress upon you how good the returns may be if you switch your pension plan to them. They may also try to convince you that such high returns are all a very low risk for you to take.
  • Pushy – Scammers are after one thing. They don’t want you to seek advice or think too hard. They will often try to push you into a making a decision, adding pressures on time for a decision to secure the deal.
  • Access your pension before age 55 – If a business is offering you an opportunity to transfer your pension into a new scheme or release funds from your pension before the age of 55 - Beware this is another big red flag for a potential scam.
  • Free advice – It may also be good to think twice when you are contacted for a free pension review from an unknown source. This can be used as an “in” to then make further contact with a view to getting you to transfer your pension to an illegal scam scheme.

What can you do to protect yourself from being scammed?

If you think you may be a victim of a pension scam, there are some actions you can take. Ensure you are aware of the big red flags outlined above.

Check that the company is registered with the FCA through the FCA Register. It is also important to note that if the company is not registered with the FCA, there would be no cover offered by the Financial Ombudsmen Service or the Financial Services Compensation Scheme (FSCS).

Some companies will be on a warning list published by the FCA, as part of their scamsmart drive. If the company who has contacted you is listed take action and do not engage any further with them.

Also ensure that a check is completed against the Companies House website for the company and against the Directors.