Pension scams

If you receive an unexpected call, text or email from an individual or firm about your pension, this may not be legitimate. Scammers are also targeting victims through social media platforms, using direct messaging or the chat functionality.

You should also be aware of anyone who contacts you unexpectedly to discuss your pension planning or offer a pension review and claims to work for a Government body such as the Money and Pensions Service (MaPs) or Pension Wise from MoneyHelper. It could be part of a scam.

If you think that you’ve been the victim of a scam you should contact us or your existing Pension Provider immediately. The following steps can help you check that a pension opportunity is genuine.

Scammers can be financially knowledgeable with authentic-looking websites, testimonials and marketing materials that are hard to distinguish from the real thing. Scammers try to persuade pension savers to transfer their entire pension savings, or take money out of it, by making attractive promises that they have no intention of keeping.

Scammers may use the terms ‘pension liberation’, ‘free pension review’, ‘limited time offer’, ‘one-off investments’ or discuss ‘loopholes’ that allow you to access funds before you’re 55. They can also promise ‘too good to be true’ returns and opportunities. These types of opportunities are unlikely to be genuine.

If you’ve been promised a high guaranteed return on your pension investment, then we recommend that you receive advice or guidance. The following steps can help you check that a pension opportunity is genuine.

Scammers will sometimes promise savers early access to their pension pot through loans, loopholes or cashback deals.

An individual or firm offering such a scheme, is likely to be trying to scam you.

Savers could lose all their money and face a high tax bill from HM Revenue and Customs (HMRC) if they withdraw their pension savings before the age of 55 (in 2028, the Government is increasing the age from which pension benefits can normally be taken to age 57).

If you've been offered an early release of cash from your pension pot, then you should check this isn't a scam. The following steps can help you check that a pension opportunity is genuine.

Scammers often ask pension savers to invest in unusual high-risk investments, which tend to be overseas, unregulated and with no consumer protections. The pension money is often invested in a range of investments like:

• overseas property and hotels
• unusual assets such as cryptocurrency, offshore bonds, crowdfunding and loans
• complicated structures where it isn’t clear where your money will end up
• renewable energy bonds
• forestry
• parking
• storage units.

If there are several parties involved in your pension, they may all be taking a fee, which means the total amount deducted from your pension is significant. You might be persuaded to invest in assets that may be locked into a fixed investment period or are otherwise difficult to sell when you need access to your money. You need to check your pension savings regularly, otherwise it could be several years before you realise something is wrong.

Many scammers often persuade savers to transfer their money into pension schemes that the scammer controls. Scammers may also pretend to help you and ask you to download software or an app so they can gain access to your device. This could enable them to also access your bank account or make payments using your card.

If you’ve been asked to invest in an unusual asset, this may be a scam. The following steps can help you check that a pension opportunity is genuine.

You can usually only take money from your pension when you’re 55 or older, except in certain circumstances, like having a terminal illness.

The Financial Conduct Authority (FCA) has warned savers to beware of scammers as thousands withdraw pension savings to cover the cost of living crisis.

If you're required to take money out of your pension to invest in a particular asset you could be being scammed. You will not normally be required to withdraw pension monies to be able to invest them. Instead, your pension savings will be invested directly in the funds or assets you select.

If you do decide to withdraw funds from your pension to invest elsewhere, you should independently verify whether the new investment is legitimate.

If you’ve been asked to withdraw money from your pension, be aware that this may be a scam. Do not proceed with any transaction that you have doubts about.

Scammers use high pressure sales tactics such as time limited offers to get the best deal. They can also use couriers to send documents to you, who may even wait with you until they’re signed. Scammers might warn you that your current pension provider or former employer will try and stop you transferring out, suggesting that they just want to keep your money.

This isn’t the case. Your pension provider will have to do some thorough due diligence checks on the scheme you’re planning to transfer to. If they suspect a scam, they have a legal obligation to try to protect your funds.

You should take your time and never be rushed into making a decision. You need to fully understand what you are being asked to do before making such a significant decision. You should also obtain suitable advice and guidance. If you don’t have one, you can find a financial adviser at www.unbiased.co.uk Advisers normally charge for any advice they give. You can also contact Pension Wise from MoneyHelper on 0808 196 2316 for guidance.