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Pension scams

Make sure you don't give away a lifetimes saving to the wrong person

On this page
What pension scams are
The different types of scams
How to spot the scam
How to protect yourself
Report fraud

What a pension scam is

A pension scam often involves a fraudster targeting someone who has access to their pension and involves encouragement 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 is 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 mean you’re charged up to 70%. 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.

How to spot a pension scam

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.

Watch out for the following:

Cold calls from anyone being forceful or trying to get you to make a quick decision about a ‘new’ scheme.

Someone offering a way to access your pension before you’ve reached retirement age.

People approaching you about investing the money from your pot for unusually big returns.

Someone calling, emailing or texting claiming to be the government offering retirement planning advice.

Pushy ‘advisors’ who are offering upfront cash and incentives.

Offers of a pension loan, savings advance or cashback.

How to protect yourself

If you’ve had a call about a pension scheme and you aren’t sure if it’s genuine or not, there are a few steps you can take to double check.

  1. 1

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

  2. 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. 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.

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