Pension information is based on current UK legislation. Pensions are regulated by the FCA and The Pensions Regulator. This is not financial advice — consider consulting an FCA-regulated financial adviser.
Contents
Pension scams have cost UK savers hundreds of millions of pounds. Knowing the warning signs can protect your retirement savings.
Warning Signs of a Pension Scam
Red Flags — Stop Immediately If You See These
Warning Sign
Why It’s Suspicious
Cold call about your pension
Illegal since 2019
Unsolicited text/email
Legitimate firms don’t approach this way
Pressure to decide quickly
Scammers don’t want you to research
Guaranteed high returns
No investment is risk-free
Access before 55
Usually illegal or massive tax penalty
Free pension review
Often lead-in to scam
Unusual investments
Overseas property, forestry, crypto schemes
One-off opportunity
Creates false urgency
Complicated structures
Designed to obscure what’s happening
The Most Common Tactics
Tactic
What Happens
Liberation scam
Promise early access (before 55), charge huge fees
Investment scam
Move your pension to fake/risky investments
Advance fee scam
Charge upfront fees, then disappear
Clone firm scam
Pretend to be legitimate company
Relationship building
Build trust over time before scamming
How Pension Scams Work
The Liberation Scam (Early Access)
Contact claims you can access pension before 55
You transfer your pension to their scheme
You receive small amount (maybe 50-70%)
They keep the rest as “fees”
HMRC taxes you 55% on unauthorized payment
You lose most or all of your pension
Example Loss:
Your Pension
£100,000
“Fee” taken by scammer
-£30,000
You receive
£70,000
HMRC tax (55%)
-£55,000
Your actual loss
£85,000
The Investment Scam
Offered “free pension review”
Advised to transfer to new scheme
Money invested in high-risk or fake assets
Investment fails or disappears
Scammers pocket fees and commissions
You have nothing at retirement
Clone Firm Scams
Scammers copy legitimate firm’s details
Contact you using their name
Slightly different phone number/email
You believe you’re dealing with real company
Send pension to scammer’s account
Real firm never received anything
Who’s at Risk
Higher Risk Groups
Group
Why Targeted
50-60 year olds
Larger pension pots, approaching retirement
Newly retired
May have large lump sums
Recently divorced
May have received pension share
Made redundant
May want to access pension
In financial difficulty
Tempted by “early access”
Regardless of Age
Anyone with a defined contribution pension can be targeted. Scammers buy data lists and contact thousands of people.
How to Protect Yourself
Step 1: Never Engage with Cold Calls
Action
Why
Hang up immediately
Don’t engage with possible scammers
Don’t press buttons
Can confirm your number is active
Don’t callback the number
May connect you to scammers
Report the call
Help stop others being targeted
Step 2: Verify Any Contact
Check
How
FCA Register
fca.org.uk/firms/financial-services-register
FCA Warning List
fca.org.uk/scamsmart
Companies House
Find registered company details
The Pensions Regulator
Check pension schemes
Important: Never use links in emails or texts. Search for the register directly.
Step 3: Be Skeptical of Promises
Claim
Reality
“Guaranteed 10%+ returns”
No legitimate investment guarantees this
“Risk-free”
All investments carry risk
“Early access no problem”
Illegal or heavily taxed
“Act now or miss out”
Pressure tactic
“Once in a lifetime”
Creating false urgency
Step 4: Take Your Time
Rule
Why
Sleep on it
Never decide immediately
Research thoroughly
Check independent reviews
Talk to someone
Discuss with family or friends
Contact your current provider
Get their perspective
Use Pension Wise
Free guidance for over 50s
Step 5: Get Proper Advice
Service
What They Offer
Pension Wise
Free, impartial guidance (over 50)
FCA-regulated adviser
Regulated financial advice
MoneyHelper (formerly The Pensions Advisory Service)
Free pension guidance
Citizens Advice
General money help
Checking If Something Is Legitimate
FCA Financial Services Register
Every legitimate UK financial services firm must be on this register.
How to check:
Go to register.fca.org.uk
Search firm name
Check address matches exactly
Check phone number matches
Verify what they’re authorized to do
Warning List
The FCA maintains a list of known scam firms: fca.org.uk/scamsmart
Contact Details Verification
Check
What to Look For
Phone number
Match exactly with FCA register
Email domain
Should match company website
Office address
Search independently, verify
Website
Check URL — slight misspellings are red flags
If You Think You’ve Been Scammed
Immediate Steps
Priority
Action
1
Stop any further payments/transfers
2
Contact your pension provider immediately
3
Report to Action Fraud (0300 123 2040)
4
Report to The Pensions Regulator
5
Contact FCA if firm claims to be authorized
Potential Recovery
Avenue
Details
Financial Ombudsman
If regulated firm was involved
FSCS
If regulated firm has failed
Legal action
Against individuals/firms involved
Pension Protection Fund
For some scheme failures
Reality: Recovering money from scams is difficult. Prevention is far better than cure.
Legal Protections
Pension Scams: The Law
Protection
Details
Cold calling ban (2019)
Pension cold calls illegal
FCA regulation
Firms must be authorized
Pension transfers
Provider must check for red flags
Statutory warning
Providers must give scam warnings
Transfer Red Flags Providers Must Check
Your pension provider may delay or refuse transfers if: