Modified on: May 2024

How to spot and avoid a pension scam in 4 simple steps

The pension scam industry

It’s a sad state of affairs to say that most people are likely to be subject to a pension scam at some point in their life. In 2018, pension scams claimed more than 3,750 victims, losing on average £91,000 each. Those numbers are scary in their own right but take a moment to think about what that means. More than ninety thousand families have lost their hard-earned retirement savings.

I’ve seen first-hand how easy it is to become a victim of a pension scam and how destructive the consequences can be. I’ve met people who after years of working hard, saving prudently and living modestly, have lost it all in a heartbeat.

They’re broken, financially, mentally and emotionally. Their plans for retirement are shattered, their hopes and dreams of a good life devastated, whilst a scammer is out there enjoying the retirement they should have had.

This article gives you everything you need to know and everything you need to do to protect you from becoming a victim of a pension scam.

How to spot a pension scam

The first thing you need to know is that pension scams are very sophisticated, and their tactics are evolving all the time.

Let’s start with how a pension scam works.

Typically, a pension scammer will contact you out of the blue, making some false claim to gain your trust. They may claim to be authorised by the FCA or acting on behalf of a Government pension service like Pension Wise.

They’ll design an attractive offer to persuade you to release money from your pension or transfer it to a new pension. If successful, they will then either steal your money outright or invest in a complicated structure that only serves to benefit them.

So how do you spot a pension scam?

There are four warning signs to watch out for. They’ll typically contact you out of the blue, offering:

  1. Better or guaranteed investment returns
  2. A special offer, often for a limit period
  3. Access to your pension before 55
  4. Unusual types of investments (overseas property, renewable energy and the like)

If they have one thing in common, it’s that they’re too good to be true.

Despite pension cold calling being banned, it still happens – more regularly than you would think. According to the Money Advice Service, more than 700,000 scam calls are made every day! In the last 12 months, 43% of adults received a suspicious call, thought to be a scam call.

How to avoid a pension scam

Here are four proven ways to avoid becoming a victim of a pension scam:

  1. Put down the phone. If you receive a cold call, the best thing you can do is hang up the phone. Similarly, if someone contacts you unexpectedly online, don’t respond.
  2. Check who you’re dealing. Check the FCA register to see who you’re speaking with. But be careful, they will often claim to be someone else entirely. If in doubt, call the FCA helpline on 0800 111 6768.
  3. Don’t be rushed or pressured. This is a tactic used by scammers to get you to make a decision quickly. You should never make a decision that affects your life savings under pressure.
  4. Get impartial information. Speak to the Pension Advisory Service or Pension Wise, two Government services designed to provide free, impartial information.

If you think you’ve been a victim of an investment scam, contact the FCA helpline straight away. Their number again is 0800 111 6768.

Your financial advisor

One of the benefits of working with a financial advisor is that they will help you avoid becoming a victim of a pension scam. As a consumer working with a regulated firm, you have a higher level of protection in case things go wrong.

At Frazer James, we hear and see about different pension scams on an almost daily basis. Clients will often tell us about an ‘investment opportunity’ that they’ve been contacted about and ask for our advice. We’ve helped quite a few clients avoid costly mistakes – much to their relief.

Whether you’ve got a financial advisor or not, make sure you have somebody watch your back. It’s all too easy to get wrapped up in the emotion of an exciting offer.

If you want to know more about how we help clients avoid pensions scams, just drop me a line.

All the best,

James Mackay, Independent Financial Adviser in Bristol


P.s – do you know about the 7 deadly investment scams?


The 7 deadly investment scams!



Financial Advisor Bristol and Pension Advisor Clifton

Frazer James Financial Advisers is an Independent Financial Advisor Bristol, Clifton.

About us: Frazer James Financial Advisers is a financial advisor, based in Clifton, Bristol. As an independent financial adviser, we’re able to provide independent and unbiased financial advice. We provide independent financial advice, retirement planning advice, investment advice, inheritance tax planning and insurance advice.

If you would like to speak to a Financial Advisor, we offer an Initial Financial Consultation without cost or commitment. Meetings are held either at our offices, by video or by telephone. Our telephone number is 0117 990 2602.

Frazer James Financial Advisers is located at Square Works, 17 – 18 Berkeley Square, Bristol, BS8 1HB.

This article provides information about investing, but not personal advice. If you’re not sure which investments are right for you, please request advice.

Remember that investments can go up and down in value, you may get back less than you put in.

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