Pension scams are a serious and growing problem. Action Fraud reports that pension fraud victims lose an average of tens of thousands of pounds — often their entire retirement savings. Scammers have become increasingly sophisticated, using professional-looking websites, fake FCA registration details, and high-pressure tactics. This guide explains how pension scams work, the warning signs to look for, and what to do if you suspect you have been targeted.
The Scale of the Problem
Data from Action Fraud and the FCA shows that millions of pounds are lost to pension scams every year in the UK. The true figure is likely higher, as many victims do not realise they have been scammed for months or even years — by which time the money has often disappeared. The average individual loss is substantial, often representing decades of pension saving.
The pension freedoms introduced in 2015, while giving people greater choice over their pension pots, also created new opportunities for scammers to target people with lump sums or those looking to transfer their pensions.
Common Scam Tactics
Pension scammers use a range of tactics, often combining several to appear legitimate:
- Cold calling: Unsolicited phone calls about your pension have been illegal since January 2019. Any cold call about your pension is either a scam or an illegal act — either way, the call can be reported to the Information Commissioner's Office (ICO).
- Guaranteed high returns: Promises of returns significantly above market rates (e.g., 8-12% "guaranteed") are a hallmark of fraud. No legitimate investment can guarantee high returns.
- Pressure to act quickly: "This offer expires tomorrow" or "You need to act now to secure this rate." Legitimate financial firms never pressure you to make immediate decisions about your pension.
- Free pension reviews: Unsolicited offers of a "free pension review" from firms you have not approached. These are often used to persuade you to transfer your pension to a scam scheme.
- Exotic overseas investments: Promises to invest your pension in overseas property developments, forestry, carbon credits, storage pods, or other unusual investments. These are typically unregulated, illiquid, and high-risk — if they exist at all.
- Early access before 55: Claims that you can access your pension before age 55 (57 from April 2028) through a "loophole." This is almost always a scam, and early access typically triggers tax charges of up to 55% of the amount withdrawn, plus scheme penalties.
Warning Signs: 10 Red Flags
Pension Scam Red Flags
- Unsolicited contact — a cold call, text, email, or social media message about your pension from someone you did not approach
- Time pressure — being told to act quickly or the opportunity will disappear
- Guaranteed returns — promises of high returns with no risk, or returns that sound "too good to be true"
- Unusual investments — overseas property, forestry, storage units, cryptocurrency schemes, or other exotic assets
- Complicated structures — the money goes through multiple transfers, companies, or jurisdictions in a way that is difficult to follow
- Courier to collect documents — being asked to hand over signed transfer forms to a courier rather than sending them to your pension provider directly
- Early access promises — claims you can access your pension before age 55/57
- Unregulated firm — the firm is not on the FCA Register, or the details do not match the firm contacting you
- Single investment — a request to transfer your entire pension into one single investment, rather than a diversified portfolio
- Discouraging independent advice — suggesting you do not need to check with anyone else or discouraging you from taking independent advice
How to Check a Firm
Before engaging with any firm about your pension, take these verification steps:
- FCA Register: Check the FCA Register to confirm the firm is authorised and has the correct permissions for the services it is offering. Be aware that scammers sometimes clone the details of legitimate firms.
- FCA Warning List: Check the FCA Warning List of firms known to be operating without authorisation or running scams.
- ScamSmart tool: Use the FCA's ScamSmart tool to check whether a pension offer could be a scam.
- Contact details: Use the contact details on the FCA Register, not those provided by the firm contacting you — scammers often provide fake phone numbers and websites.
What the FCA Says
The FCA has introduced several measures to protect pension savers:
- Mandatory advice for large DB transfers: If your defined benefit pension has a transfer value over £30,000, you are legally required to take advice from an FCA-authorised adviser before transferring.
- Pension cold calling ban: Since January 2019, unsolicited calls about pensions are illegal. Firms that breach this can be fined up to £500,000.
- Transfer conditions: Pension schemes must now carry out due diligence checks before processing a transfer, including checking for red flags and, in some cases, requiring evidence of advice or guidance.
What to Do If You Think You Have Been Scammed
If you suspect that you have been the victim of a pension scam, act immediately:
- Contact your pension provider immediately. They may be able to stop or reverse a transfer if it has not yet been completed.
- Report to Action Fraud on 0300 123 2040 or online at actionfraud.police.uk. This is the UK's national reporting centre for fraud.
- Report to the FCA on 0800 111 6768 or through their website. This helps the FCA identify and shut down scam operations.
- Contact The Pensions Ombudsman if you believe your pension scheme did not follow proper transfer procedures, which may have allowed the scam to proceed.
- Seek legal advice. Depending on the circumstances, you may have grounds for a complaint or compensation claim against firms involved in the transfer chain.
Protecting Yourself
- Never respond to unsolicited contact about your pension — whether by phone, email, text, social media, or post
- Always check the FCA Register before dealing with any financial firm, using the contact details on the Register to verify the firm's identity
- Take your time. Legitimate investment opportunities do not expire overnight. If someone pressures you to decide quickly, walk away
- Get independent advice before transferring your pension, particularly for large pots. An independent adviser has no interest in directing you towards a particular scheme
- Use Pension Wise. The government's free and impartial Pension Wise service (via MoneyHelper) offers guidance appointments for over-50s
For more on pension transfers and the rules that apply, see our pension transfers guide. To understand how financial regulation protects you, read our guide on understanding financial regulation. You can also search our directory to find an FCA-authorised adviser in your area.
This guide is for general information only and does not constitute financial advice. The information is based on publicly available data from the FCA, HMRC, and other government sources. Always seek professional advice before making financial decisions. Figures and thresholds are subject to change — check official sources for the latest values.