Avoiding pension scams

Scammers are often unknown contacts who will attempt to gain your trust by making false claims. They will likely say they are authorised by the FCA and present unsolicited but attractive investment opportunities, in an attempt to gain control of your pension pot. In other circumstances the money may be stolen outright.

If an offer seems too good to be true, it likely is just that. Some warning signs to watch out for include low risk, high return investment opportunities, “free” pension reviews, aggressive sales tactics and complicated investment plans, where it is unclear where your money will end up. If you are called by an unknown number and presented any of these opportunities, it is almost certainly a scam. You should be aware however, that following the cold call ban of 2019, many scammers focus on social media to reach people.

Another way scammers operate is to ask their victims to refer friends, family and colleagues to them. At this point the scammers have usually built a strong relationship with their original victim, who believes they have received a good service. It can be many years before it becomes apparent that someone has lost their pension. If you are referred to someone you are told can help you with your pension, please stay vigilant and check the advisor is who they say they are. You can use the FCA’s firm checker to help with this - FCA Firm Checker.

Common scams to be aware of are early pension release and pension review scams. Any scheme offering to help you release cash from your pension before you’re 55 is almost always a scam, as payments from pensions cannot usually be made before this age (except in very tightly defined circumstances, such as for cases of ill-health). Additionally, pension review scams contact people unexpectedly, offering a free pension review. This could be a phone call, an email, text message or an offer in an online advert. Most of the companies offering free pension reviews are not FCA authorised but may falsely claim they are.

Listed here is a summary of the warning signs the Financial Conduct Authority's (FCA) have highlighted to help people identify if they may be at risk of being scammed:  

• Is it unexpected? Scammers often call out of the blue. They may also try and contact you via email, text, post, social media, or even in person.
• Do you feel pressured to act quickly? Scammers might offer you a bonus or discount if you invest quickly, or they may say the opportunity is only available for a short time.
• Does the offer sound too good to be true? Fraudsters often promise tempting rewards, such as high returns on an investment.
• Is the offer exclusively for you? Scammers might claim that you’ve been specially chosen for an investment opportunity, and it should be kept a secret.
• Are they trying to flatter you? Scammers often try to build a friendship with you to put you at ease.
• Are you feeling worried or excited? Fraudsters may try to influence your emotions to get you to act.
• Are they speaking with authority? Scammers might claim that they’re authorised and often appear knowledgeable about financial products.

If you answered ‘yes’ to any of these questions, use the FCA Firm Checker or Contact the FCA to obtain more assurance.

The FCA recommends the following approach to protect yourself if you have doubts:

Step 1 - Use the FCA Firm Checker to verify if a person or firm are authorised or registered with the FCA.

Step 2 - Contact the FCA if you're struggling to verify the person or firm's details.