How to Protect Yourself from Pension Scams

If you’ve worked hard to save for retirement, the last thing you want is for a scam to undo years of planning. Sadly, pension fraud is a very real threat, and falling victim can be financially devastating. But by understanding how scams work and how to spot the warning signs, you can take simple, sensible steps to keep your pension safe.

What Is a Pension Scam?

A pension scam is when someone tries to trick you into handing over your pension savings. These fraudsters are often very convincing, and the scam usually starts with an unexpected phone call, email, or message offering to help you access your pension early or invest in something “exclusive.”

They may tell you it’s a time-sensitive opportunity or suggest ways to move or “liberate” your pension that sound legal but aren’t. In truth, their goal is to get you to transfer your pension money into a scheme they control. And once that money is gone, it’s usually gone for good.

In some cases, you might also face an unexpected tax bill or fees on top of losing your savings—making the impact even worse.

What Is a Secondary Scam?

If you’ve already lost money to a pension scam, you may be at risk of a second one. Fraudsters often target previous victims by pretending to offer help in getting your money back. They might ask for an upfront fee or personal details under the promise of recovering your losses.

These follow-up scams prey on people who are already vulnerable, often when they’re still reeling from the financial and emotional blow of the first scam.

Why Pension Scams Are Still a Problem

Pension scams have been around for years, and the problem hasn’t gone away. Since the introduction of pension freedoms in 2015, fraudsters have become more creative and persuasive.

Although reports of pension scams dropped in the years leading up to 2020, a sharp increase followed in 2021—likely fuelled by the uncertainty of the pandemic. According to the Financial Conduct Authority (FCA), UK fraudsters stole more than £2.4 million in less than six months that year. The true figure is likely higher, as many scams go unreported.

Raising Awareness and Stopping Scams

Several organisations have been working to raise awareness and help people spot scams before it’s too late.

The Pension Scams Industry Group, formed in 2014, created a Code of Good Practice for pension providers to follow. The FCA’s ScamSmart campaign, launched in 2022, continues to share practical advice through pension providers and schemes.

Meanwhile, The Pensions Regulator has encouraged schemes to formally pledge their commitment to tackling scams. This includes warning members regularly and taking extra care with transfer requests that may raise red flags.

How to Spot the Signs of a Pension Scam

It’s not always easy to tell when something isn’t quite right, especially if the person contacting you sounds professional and friendly. But here are some common warning signs to watch for:

• You’re contacted unexpectedly about a pension opportunity, especially one that needs a quick decision.
• They suggest you can access your pension before age 55.
• You’re encouraged to take out a large lump sum—or even your entire pension pot—and let them invest it for you.
• They use terms like “pension liberation,” “free advice,” “loan,” “loophole,” or “one-off investment.”
• The investment is described as unique, overseas, ethical, environmentally friendly, or part of a new industry.

Even if it sounds legitimate or helpful, stop and take a step back. A regulated financial professional will never pressure you to make hasty decisions.

How to Protect Yourself

The best defence is to take your time and get the facts before doing anything with your pension. Don’t be rushed—fraudsters often rely on urgency to stop you thinking clearly.

Make sure you’re only dealing with firms that are authorised by the Financial Conduct Authority (FCA). You can check a company’s status on the FCA Register at www.fca.org.uk/register. It’s also a good idea to call companies using the number listed on the register—not a number given to you in an email or phone call.

Even if a company name sounds familiar or appears legitimate, scammers can copy branding and websites to look official. Double-checking through the FCA website helps you avoid impersonators.

Reporting a Suspected Scam

If you think someone has tried to scam you—or you’ve already handed over information or money—it’s important to act quickly.

Start by telling your pension provider. They may be able to stop a transfer in progress or put additional checks in place. You can also report the scam to:

• The Financial Conduct Authority (FCA) on 0800 111 6768 or through their website
• Action Fraud, the UK’s reporting centre for fraud, at actionfraud.police.uk or on 0300 123 2040
• If you’re in Scotland, contact Police Scotland directly by calling 101

Even if you’re not sure, reporting it helps protect others and may stop the fraudsters from targeting someone else.