You’ve worked all your life to build up your pension pot, with dreams of a perfect retirement. Now imagine losing it all. Pension fraudsters are just waiting for you to slip up, so they can empty your retirement savings and disappear. We’ve got some advice to help keep you safe from those pension predators.
How to spot a pension scam
Pension scams are becoming more sophisticated, but there a few common things you can be watchful for. If you experience any of these, you could be dealing with a scammer.
Pension cold calls were banned in January 2019 so you shouldn’t expect anyone interrupting your day to ask about your pension. Don't engage with cold callers and risk a conversation as they’ll be looking for even small bits of information they can use in future – just hang up.
If you get a call from someone claiming to be your pension provider, pension scheme or the government – firmly tell them that you’ll call them back. But don’t accept any phone numbers they offer you, find it yourself on the relevant website.
Free pension reviews
Scammers may offer a ‘free’ review of your pension savings with the promise of better returns. They’ll make up problems with your current pension and suggest transferring to a different scheme – often overseas. In reality, it’s a fake pension transfer service that they’ll use to get access to your pension and steal your money.
The only way to get a proper review of your pension is to consult a regulated financial adviser. If you don’t want to pay for financial advice, you’ll need to do your own research instead. Pension Wise from MoneyHelper is a free, government-backed service for the over 50s. It offers clear and impartial guidance on your retirement options.
Offers to unlock cash
Scammers will often lie that they can help you can access your pension money earlier. The normal age to access up to 25% of your pension tax free is 55, rising to 57 from 6 April 2028 – unless you have a protected pension age or are in poor health. Taking money from your pension before then will lead to penalties from HMRC. Scammers who promise to transfer it so you can get access will just steal your money.
Before you make any big decisions about taking your pension before retirement age, we recommend that you look at guidance from Pension Wise or speak to a financial adviser.
Genuine pension providers and financial advisers are banned from pressure selling products or dangling time-based offers. If you’re being rushed to make a decision, take a moment and back off. It’s likely you’re dealing with a fraudster.
Be wary of pension investments that promise big returns with no risk. These can be pitched as things like overseas investments, new technology or property. All investments carry risk and if something sounds too good to be true, it probably is. Get rich quick schemes rarely work out for anyone but the scammer.
If you want to invest and you’re bemused by your choices, make an appointment with a regulated financial adviser. You can find one on Unbiased – there may be a charge for their advice.
What should I do if I'm being targeted for a pension scam?
If you think scammers are after your pension, it’s important to take action right away. Firstly, get in contact with your pension provider. Only use phone numbers or email addresses that you can confirm on their actual website, or letters you’ve received in the past. Double check the numbers and make sure they match before calling. Let them know what’s been happening, so they can secure your pension and prevent any withdrawals. You should also take the following steps.
Hang up the phone if you’re called and don’t open any suspicious emails or click on links, just delete them. Don’t give out any more personal information like your bank details, NI number or pension details.
Report the scam
Contact Action Fraud and the Financial Conduct Authority (FCA). Give them as much information as possible about the scam – like any contact details you were given and exactly what they wanted to you to do.
Warn others and get advice
Spread the word to family and friends and your social networks, so other people don’t fall victim to scams themselves. It may also be worth speaking to a financial adviser, who can support you with ways to make your accounts more secure.
What if I've already been scammed?
If you've been the victim of a scam and have taken the steps above, you should seek out legal advice. Then you’ll be able to understand what your options are, and whether there’s any chance to get some or all of your money back.
As you’ll be at high risk of further identity theft, you should change all your online passwords and security questions for accounts like online banking. It’s also worth placing a fraud alert on your credit report. Cifas, the UK's fraud prevention service, can place a protective registration warning on it. This will tell lenders your personal information is at risk of being used fraudulently.
Tips to reduce your chance of being scammed
Firstly, don’t reply to cold calls or texts. Think about using a home phone that allows you to block calls from numbers other than a list of trusted ones. You can also do this in the settings on your mobile phone.
Don’t answer calls from numbers you don’t recognise. Genuine callers will leave a voicemail and you can always add them to your trusted caller list if they turn out to be genuine.
The Financial Conduct Authority offers more guidance and tips on how to avoid being caught out by scammers. Learn more about their ScamSmart initiative here.
To find out more about keeping your money secure and learning the latest tactics being used by criminals, visit our fraud hub. And if you see or hear anything suspicious that appears to be coming from us, you can report it right away.