Avoiding pension scams

You need to make sure you’re keeping your pension savings safe from scammers.

You may think you won’t fall victim for a scam, but fraudsters have become increasingly sophisticated in their approaches, by producing professional looking brochures and websites promoting attractive but bogus offers.

They often target pension members to try and tempt them to transfer to scam schemes or prey on members who may have recently retired and have large pension tax-free cash sums to invest. We’ve set out below a few tips to try and help you avoid a pension scam.

Please read the following information carefully to ensure you don’t let a scammer steal your pension.

Reject unexpected offers and advice

If you’re contacted out of the blue about a pension opportunity, chances are its 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.

Be wary if you’re contacted about any financial product or opportunity and they mention using your pension. This is dangerous for you and your money. If you get unsolicited offers via email or text, you should simply ignore them. Do not click on the links.

Be wary of offers of free pension reviews. Professional pensions advice 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 for yourself.

Get regulated advice and protect your money

If you need advice about what might be best for your circumstances, please consider speaking to an independent financial adviser.

Don’t be rushed

The last thing you need is to feel rushed or pressured into making a decision, this is how most scammers behave. Take your time to make all the checks you need, even if this means turning down an ‘amazing deal’.

Remember to do your research, and always check that the financial adviser is authorised by the FCA. If you don’t use an FCA-authorised firm, you also won’t have access to FSCS or the Financial Ombudsman Service so you’re unlikely to get your money back if things go wrong.

Be mindful

Be cautious when you hear phrases like, ‘pension liberation’, 'loan’, ‘loophole’, ‘savings advance’, ‘one-off investment’ and ‘cashback’. Most of these are key phrases used by scammers. Other things to look out for include:

• Guarantees that they can get better returns on pension savings. 
• A promise of accessing cash from a pension early, with no mention of the HMRC tax bill that can arise.
• High pressure sales tactics – time limited offers to get the best deal; using couriers to send documents, who wait until they’re signed.
• Unusual, complex, high-risk investments, which tend to be overseas, unregulated, with no consumer protections.

How to report a scam

If you suspect a scam, report it to the FCA using this online reporting form or use their scam smart service and report it to Action Fraud.

ScamSmart: Don’t let a scammer enjoy your retirement