Fraud guides

Pension scams

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What a pension scam is

A pension scam often involves a fraudster targeting someone who has access to their pension and involves encouraging them to move the funds, which may result in money being lost or unreasonable charges.

The two types of scams to look out for

Accessing your pension before the age of 55

A promise to convert your pension to cash before retirement, and sometimes before the age of 55, can also be called pension liberation.
This name makes it sound positive, but it's not usually possible to access your pension before the age of 55 unless you are seriously ill.
If someone offers you a scheme like this, it’s probably a scam and will result in serious tax consequences.
In fact, taking your pension early could mean you’re charged up to 70% of your pension value. On top of that, the company offering this will probably have transfer fees that could also take a large portion of your pension pot.

Investing your pension in to a dodgy scheme

If someone calls you out of the blue offering you an investment scheme with attractive returns for your pension pot, then it’s likely to be a scam.
If you’re over 55 and are deciding what to do with your pension pot, always speak to a legitimate financial advisor.

Things to look out for

Luckily, both of the types of pension scams are fairly easy to spot. They will likely begin with an unexpected phone call and a scheme that seems too good to be true.

Unexpected calls

There has been a government ban on cold calls regarding pensions so you shouldn't receive them unless you have asked them to.

Early access to funds

Someone offering a way to access your pension before you’ve reached retirement age. Remember, taking your pension early could mean you incur charges

Investment opportunities

If someone calls you out of the blue offering you an investment scheme with attractive returns for your pension pot, then it’s likely to be a scam.

Pushy 'advisors'

Where you are pressured into making a quick decision about a ‘new’ scheme or encouraged to transfer your pension quickly.

1

Check if the person or company is legitimate by having a look at the Financial Services Register or calling the Financial Conduct Authority on 0800 111 6768.
2

If the call is from a company you recognise but you’re not sure if it’s legitimate, put the phone down immediately, find the company’s phone number on their website and ring them directly.
3

Don’t give away your financial or personal details over the phone. A legitimate scheme and company will not ask for these.

If you think you’ve been a victim of a pension scam, make sure you report it report it to Action Fraud on 0300 123 2040, or use their online reporting tool.