Pension scams can be hard to spot, and in this article, we wanted to provide you with more information as to how pension scams work, how you can avoid them and what you should do if you suspect a scam.

Unfortunately, scammers can be articulate and financially knowledgeable individuals, with credible-looking websites and testimonials that can be hard to distinguish from the real thing.

How does a pension scam work?
Scammers will usually contact people out of the blue via phone, email or text, or they may even advertise online. Sometimes they may even be introduced to you via a friend or family member, who is also unknowingly being scammed.

Scammers will make false claims to gain your trust, such as claiming that they are authorised by the Financial Conduct Authority (FCA) or that they don’t have to be FCA authorised because they aren’t providing the advice themselves.

Scammers will design attractive offers to persuade you to transfer your pension pot to them. It’s then often invested in unusual and high-risk investments, or sometimes the funds will be simply stolen outright.

How do I know if it’s a scam?
Be cautious if an individual or a company does or offers you any of the following things:

  • Being contacted out of the blue
  • Promises of high and/or guaranteed returns
  • Free pension reviews
  • Access to your pension before the age of 55
  • Pressure to act quickly

How can you protect yourself from pension scams?

  1. Reject unexpected offers. If you’re contacted out of the blue regarding a pension opportunity, chances are that it’s high risk or a scam. If you do get a cold call about your pension, the best thing to do is to hang up. If you get unsolicited offers via email or text, you should simply ignore them.
  1. Make sure you know who you are dealing with and always check the FCA Register to make sure that anyone offering you advice or other financial services is FCA authorised. If you don’t use an FCA-authorised firm, you won’t have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme (FSCS), so you’re unlikely to get your money back if things go wrong.
  1. Do not be rushed or pressured. Ensure you make all the checks that you need and be wary of promised returns that sound too good to be true.
  1. Obtain impartial information or advice. Our team of financial advisers can help you to make the best decision for your own personal circumstances.

What should I do if I suspect a scam?    

If you do suspect a scam, then you should carry out the following actions:

  • Report it to the FCA by contacting their Consumer Helpline on 0800 111 6768 or using the reporting form at fca.org.uk
  • Report it to Action Fraud by calling 0300 123 2040.
  • If you’ve agreed to transfer your pension and now suspect a scam, contact your pension provider immediately and then get in touch with The Pensions Advisory Service (TPAS) at thepensionadvisoryservice.co.uk.