Pension scams are increasingly prevalent in the UK. While the Pension Schemes Act 2015 gave people over 55 more flexibility in accessing their pension pot, it also meant that fraudsters could take the opportunity to exploit this newfound freedom.
Pension scammers target people of any age, regardless of how big or small their retirement savings are. Fraudsters seek out people and trick them into transferring or releasing their pension pots, often promising high returns or quick cash if you’re under 55. By the end of 2023, Action Fraud UK stated that over £17 million had reportedly been lost to pension fraud, creating an average loss of over £46,000 per person affected.1
Given this widespread concern, help protect yourself and your pension from scammers by following these six simple steps.
1. Check who you’re dealing with
If an individual or company contacts you out of the blue to discuss your pension, it’s likely to be a scam. In 2016 the government banned companies from cold calling about pensions. If you receive such a call do not engage with the caller and hang up.
2. Never give out personal information
You wouldn’t share your personal information with a stranger, so don’t make an exception for scammers. Don’t give them any information about yourself – especially not investment or bank details. Remember to trust your instincts if it doesn’t feel right.
3. Be aware of false claims
Scammers will make false claims to gain your trust. If they claim you can take money from your pension before the normal minimum pension age of 55 (this is expected to rise to age 57 from 2028) this is not true and is usually only possible if you’re in ill health or have a protected low pension.
4. Understand the conditions of your pension
If you’re encouraged to transfer your pension or withdraw money from your pension to take advantage of an investment opportunity, you should be very wary. Protect your pension savings, as once you’ve transferred your money into a scam, it’s too late.
5. Don’t be pressurised into making a quick decision
You should take your time when making decisions about your pension. Don’t commit straight away, do your research first and read any documents you receive carefully. Most importantly, don’t sign anything, unless you fully understand what you’re getting into.
6. Report any worries immediately
If you’re in any doubt or have concerns speak to your pension provider or financial adviser before proceeding with the transfer. Alternatively, if you don’t have a financial adviser, you can visit MoneyHelper to get free impartial information. You should also report any suspicions to the FCA.
It can be easy to fall for a pension scam, but these 6 steps will help protect you. You can also find more information about pensions scams within our online security and fraud protection hub.
Other useful sources to refer to:
1. Financial Conduct Authority (FCA) register
2. Moneyhelper
3. FCA
1 #ProtectYourPension: Action Fraud warns to look out for pension fraudsters as new data reveals a total loss of £17.7 million in 2023 | Action Fraud. Data source, Action Fraud, September 2024. Accessed November 2024.