Avoiding scams

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Your pension is likely to be one of your most valuable assets, so it is important that you protect it from scammers who want to trick you out of your hard-earned money.

The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) have recently joined forces to warn the public about fraudsters targeting people’s retirement savings.  They have found that no matter how experienced or confident you are with your finances, you can still fall victim to these kinds of schemes if you do not know the red flags to look out for.

Six common tactics used by pension scammers (and how they work):

  • Offering exotic investment opportunities

3% of 45 to 65 year old pension savers would pursue an offer of high returns in either overseas properties, renewable energy bonds, forestry, storage units or biofuels. However, research notes that these are high-risk investments and unlikely to be suitable for pension savings.

  • Calls out of the blue

23% of 45 to 65 year old pension savers would engage with a cold call from a company asking to discuss their pension plans. Cold calls about pensions are now illegal.

  • Offering early access to your pension pot

17% of 45 to 54 year old pension savers would be interested in a company that offered them early access to their pension pot yet this would lead to a significant tax charge.

  • Guaranteed high returns on your pension savings

13% of 45 to 65 year old pension savers would pursue an offer guaranteeing returns of 11% on their pension savings. However, these are almost certainly false guarantees.

  • Offering to review your pension for free

10% of 45 to 65 year old pension savers would say “yes” to a free pension review from a company they had never dealt with before – yet this is almost certainly a scam.

  • Time limited offers

7% of 45 to 65 year old pension savers would say “yes” to a company offering a special deal that would not be around for long, and which also offered to send a courier to deliver the paperwork and obtain a signature in order to return it immediately. Such time limited deals are offered to force people to make a quick decision without receiving appropriate advice.

  1. Professional advisers will never cold call you. If you receive an unsolicited phone call, text or social media message offering you a pension review or a one-off investment opportunity, it will be a scam.

  2. You can find out more about common tricks used by scammers and how you can protect yourself here.

  3. If you think you have been targeted by a scam, you should end any communication with the scammer immediately and contact the Information Commissioner's Office here.

  4. Make sure that any financial adviser you consult is impartial, authorised and regulated by the Financial Conduct Authority (FCA) and is qualified to talk to you about pensions.