Pension Scams: What to Look Out For

  • Pension scams
Julie Hunt, Face to Face Finance

Pensions are the main way most people will pay for themselves once they’ve retired from the working world. You save for decades to build up a nice pot of money to keep you going. 

Now, imagine the money you accumulated during all those years of saving disappears. How will you support yourself as a retiree? 

Pension scams are on the rise in the UK. Fraudsters are scamming victims out of tens of thousands of pounds of their hard-earned savings. 

How to know if you are being scammed

Scammers are now creating convincing websites and an online presence which means it might not be immediately obvious that they are up to no good. There are, however, a number of signs that you can look out for to keep you safe from the scammers. 

Here are 5 questions to ask yourself if you are suspicious:


1 – Is the company regulated by the FCA? 

The easiest way to tell if you are in contact with a genuine financial company or a scammer is to check whether the caller is registered with the Financial Conduct Authority (FCA). These companies are regulated so are able to offer sound, professional financial advice. You can find a list of all registered companies on the FCA website. This should always be the first place you check. 

Most pensions companies will not directly contact you about your pension without your permission. The best thing to do if you get a cold call about your pension is hang up. If you get emailed or texted, ignore the messages. 

The government is currently working on a scheme that will ban pension cold calls. So soon it should be easier to spot when someone is attempting to scam you.


2 – Are you under the age of 55? 

Be wary of people encouraging you to release cash from your pension before the age of 55. This can be called ‘pension liberation’ or a ‘pension loan’. 

Should you take money from your pension pot before the age of 55 you could face a large tax bill of 55%, plus other charges, on what you withdraw. This is definitely not in your best interests!


 Do you feel pressured or is it a limited time only offer?

A reputable pension adviser will never pressure you into making a big decision there and then. So, if you are feeling under pressure to commit to an offer you should just walk away. 


4 – Does it sound too good to be true? 

If the answer is yes, then it usually is! Be suspicious of anyone who is offering high/guaranteed investment returns or ways of avoiding paying tax.  


Once you have transferred your money across to the scammer it is unlikely that you will get it back. If you use a firm who is not FCA registered you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FCSC).

If you think you have a scammer on your hands, check the FCA’s Scamsmart website where you’ll find information on any known scams and firms on their warning list. Always report a scam if you come across one. Help others avoid becoming a victim. 

It is always recommended to get independent advice when you are considering doing anything with your pension. Get that advice from a reputable, FCA authorised company and you will be in safe hands. 

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