Pension scams can be hard to spot. Scammers can be articulate and financially knowledgeable, with credible websites, testimonials and materials that are hard to distinguish from the real thing.
How pension scams work
Scammers usually contact people out of the blue via phone, email or text, or even advertise online. Scammers will make false claims to gain your trust. For example:
- Claiming 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
- Claiming to be acting on the behalf of the FCA or the government service Pension Wise
Scammers design attractive offers to persuade you to transfer your pension pot to them (or to release funds from it). It is often then invested in unusual and high-risk investments like overseas property, renewable energy bonds, forestry, storage units, or simply stolen outright.
Scam offers - what to look out for
Scam offers often include:
- Free pension reviews
- Higher returns - guarantees they can get you better returns on your pension savings
- Help to release cash from your pension, even though you’re under 55 (an offer to release funds before age 55 is highly likely to be a scam)
- High-pressure sales tactics - the scammers may try to pressure you with ‘time limited offers’ or even send a courier to your door to wait while you sign documents
- Unusual investments which tend to be unregulated and high risk, and may be difficult to sell if you need access to your money
- Complicated structures where it isn’t clear where your money will end up
- Long-term pension investments – which mean it could be several years before you realise something is wrong
If you suspect a scam, report it
Report to the FCA - You can report an unauthorised firm or scam to us by contacting our Consumer Helpline on 0800 111 6768 or using our reporting form.
Report to Action Fraud - If you suspect a scam you should report it to Action Fraud on 0300 123 2040 or at http://www.actionfraud.police.uk/
If you've agreed to transfer your pension and now suspect a scam, contact your pension provider straight away. They may be able to stop a transfer that hasn't taken place yet.
If you are unsure of what to do contact The Pensions Advisory Service for help on 0800 011 3797.
Be ScamSmart with your pension. To find out more, visit www.fca.org.uk/scamsmart
FCA Transferring out videos
Find out what to expect when getting advice about whether to transfer your defined benefit (DB) pension to a defined contribution (DC) pension.
Video: What to expect from pension transfer advice