How to avoid a pension scam

This article has been reproduced with kind permission of Openwork Limited.

The government’s Pension Wise service has warned that pension scams, where criminals cheat people out of their pension pots, are on the increase.

There are different types of scam, but they often begin by someone contacting you unexpectedly by phone, email or letter. They may invite you to learn more about:

  • an investment or other business opportunity that you’ve not previously spoken to them about
  • taking your pension savings before you’re 55
  • the ways that you can invest your pension money

Most of these offers are misleading (you can only take your pension money before age 55 in very rare cases, for example) or completely fake – but they can appear very convincing.

The scammers’ aim is to get you to cash in your pension pot and transfer the money. Once you’ve transferred your money into a scam, it’s too late. You could lose all of your pension

money, or face tax of up to 55% or huge additional fees.

How to tell if it’s a scam

Watch out if an individual or company:

  • ‘cold calls’ you about your pension money by phone, text, visiting you in person, or in other ways
  • says you can access your pension money before 55 and that they can help you with this
  • encourages you to take out a large lump sum, or your whole pension pot as cash, so that they can invest it for you
  • asks you to transfer your money quickly, even sending documents to you by courier (you should never make a rushed decision about your pension money)
  • uses words like ‘pension liberation’, ‘loan’, ‘loophole’, ‘free pension review’ or ‘one-off investment’
  • offers you an investment described as ‘unique’, ‘overseas’, ‘environmentally friendly’, ‘ethical’ or in a ‘new’ industry

How to protect yourself

Check if the person or company contacting you is on the Financial Services Register by visiting or calling the Financial Conduct Authority (FCA) on 0800 111 6768. If you call the person or company back, use the phone number for them that’s on the Register. If anyone cold calls you claiming to be from the government, a pension provider or other organisation, and asks for your personal or financial details, don’t reveal them. Hang up if you need to.

Contains public sector information licensed under the Open Government Licence v3.0.