How to spot a pension scam

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Imagine losing your entire pension pot in the blink of an eye. All that hard-earned money you’d put away gone in an instant.

Pension scams are becoming increasingly sophisticated and more commonplace. The fraudsters behind them are waiting for you to drop your guard so they can empty your life savings without you even knowing.

This article will provide useful information to help you identify, avoid, and report pension scams so that you can protect your savings.

What is a pension scam?

Pension scams can be difficult to spot and often seem like a legitimate investment opportunity. Scammers can be plausible, charming, and knowledgeable about their subject. They’ll befriend you and attempt to gain your trust. And all the while they’re trying to dupe you into handing over your personal details or transferring your pension pot over to them.

Pension fraudsters often use websites and testimonials that appear genuine and are difficult to distinguish from the real thing. They’ll make promises of guaranteed high returns or unmissable deals and know all the tricks to get you to part with your savings.

According to the The Pensions Regulator, pension fraud totaled £17.5 million in 2024. The average loss was approximately £34,000 per individual.

If you’ve been contacted out of the blue by someone asking to discuss your pension arrangements, or if you’ve accepted the offer of a free pension review, you may have been scammed.

What types of pension scams are there?

Before we go further it’s worth remembering that anyone can access their pension from the age of 55 (rising to 57 from April 2028). It also means that criminals are devising even more complex pension scams aimed at stealing some or all of your savings. 

For example, scammers may attempt to persuade you to cash in your pension or part of it before running away with your savings. They may ask you transfer the money to them to invest in a more profitable scheme that doesn’t exist.

Below is a list of common, tell-tale signs that will help you identify pension fraud and spot a pension scam:

Cold calling scams

Pension cold calls were banned in the UK in 2019. Therefore, if you receive a cold call regarding your pension, it’s a scam. 

No company should contact you about your pension unless you specifically asked them to do so. If you receive a cold call don’t engage with the caller or start a conversation that could reveal key information, and simply hang up.

Similarly, if someone calls claiming to be your pension provider or representing your pension scheme or the government, tell them you’ll call back. Don’t use the number they provide but get it from the official website.

Early pension access scams

You can access up to 25% of your pension tax free from the age of 55. The age limit will rise to 57 from April 2028 unless you have a protected retirement age or are in poor health. Withdrawing money from your pension before then will result in financial penalties from HMRC.

However, scammers will try and con you into transferring your pension into another scheme so that you can access it early, before stealing all your money.

Free pension review scams

A common tactic used by fraudsters is to offer a free, no-obligation review of your pension plan with the promise of a higher return on your investment. They may attempt to gain your trust by highlighting problems with your pension and how these can be resolved.

The next stage of the scam is likely to involve transferring your pension into a different scheme, typically overseas. This is merely a fake transfer service from where the scammer can access your pension savings and steal your money.

If you are in need of professional retirement and pension advice you should speak to your pension provider or consult a regulated financial adviser.

Quick money-making scams

Here, you’ll be offered promising huge returns on your savings with no risk attached. These are almost certainly going to be pension scams. These get-rich-quick schemes often come in many forms including overseas investments, property deals, and technology opportunities.

While any form of financial investment involves an element of risk, pension schemes that sound too good to be true more than likely are and are probably the work of criminal scammers.

Hard-sell scam tactics

Authentic pension providers and certified financial advisers are prevented from pressure selling by law. Also, any time-sensitive investment scheme demanding you take immediate action is also banned in the UK.

If the person you’re speaking to or corresponding with is rushing you to make a decision about your pension savings, back away and take time to reflect. It’s highly likely you’ve been approached by a pension scammer.

3 ways to protect yourself from pension scams

If you’ve been contacted out of the blue about a pension offer, it’s more than likely a scam. The following four steps will help you protect yourself and your savings, from the hands of fraudulent criminals.

1. Decline unexpected investment offers

As stated above, pension cold calling is banned in the UK. If you receive a call offering lucrative investment opportunities that involve transferring your pension to another scheme, it’s probably a scam so just hang up the phone.

Pension cold calls are illegal and should be reported to the to the Information Commissioner’s Office (ICO).

Similarly, any unexpected offers you receive via email or text are likely to be scams and should be rejected. You shouldn’t even take investment advice from people you know – it may be that they’ve been scammed and are drawing you in too.

2. Always check the source

Always check that anyone offering you a financial service or investment advice is authorised by the Financial Conduct Authority (FCA). If you go ahead and use a person or provider who isn’t FCA-authorised you won’t have access to Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service if you end up being scammed.

Another safety layer is to check they are registered with Companies House and to research the names of the listed directors to look for suspicious activity.

3. Seek independent advice

If you’re considering changing your pension plans, you should get professional financial advice before you act. A financial adviser will discuss your pension savings and discuss your personal circumstances so they you make the best decision for you and your loved ones.

If you contact a financial adviser, make sure they are FCA-regulated by searching for their name on the Financial Services Register (FS Register), and never take advice from a company that contacts you claiming to be a pension provider, as it’s likely to be a scam.

What should I do if I suspect a pension scam?

If you suspect you’ve been scammed, you should act immediately and call your pension provider. Make sure you take the number that’s displayed on the company’s website or from official letters received in the post.

Taking swift action now will help your provider secure your pension and block any withdrawals or fraudulent transfers into fake accounts.

After following the advice above, you should:

End all communication

Hang up immediately if you received a phone call. Also, don’t open suspicious emails and don’t click on any links but delete them instead.

If you suspect you’re being contacted by pension scammers never hand over your personal details or any sensitive information like your bank details, National Insurance number, or pension scheme.

Report the scam to the correct authorities

If you experience a scam, you should report it to the Financial Conduct Authority and Action Fraud. Provide as much information as possible such as any contact details you were given and the nature of the call.

At the same time make friends and family aware of the scam so they can avoid falling into the trap and look at ways of making your private and social media accounts more secure.

What should I do if I’ve been scammed?

If you think you’ve been the victim of a pension scam you should follow the advice above and seek legal advice. This will provide you with a list of options available to you such as:

• How to retrieve some or all of your stolen money.
• Who else you should contact.

If you’ve been the victim of a pension scam you could be at risk of further identity theft in the future. Therefore, to protect your personal data, you should change your online passwords and banking details along with any other accounts that store your private information. 

The threat of pension scams has become so significant that government bodies, prison industry representatives and law enforcement agencies joined forces to form the Pension Scams Action Group (PSAG) in a bid to tackle the evolving threat head on.

Do you suspect a pension scam?

If you’re concerned you may be the victim of a pension scam, read our helpful advice and discover what action to take next.