Pension Scams

Pension fraud has been on the rise ever since pension freedoms was introduced in 2015, allowing the over 55s to access money in their retirement pots.

Since introduced, more than £37 billion1 of taxable flexible withdrawals have been made from defined contribution pensions.

Scammers have seized the opportunity to help themselves to a chunk of this money, offering fake services to individuals who believe they are making lucrative investments.

Sadly, their money often disappears, never to be seen again. Despite campaigners raising the alarm about the scams for years, fraudsters continue to thrive, constantly resorting to new tricks to stay one step ahead.

The numbers are worrying. Action Fraud reported a doubling of the average amount lost by pension scam victims in 2021 to £50,000 from around £23,689 in 2020, with the Pension Scams Industry Group (PSIG) estimating 40,000 people lost around £10 billion to fraudsters since 20152.

Progress is being made, however, with new measures3, introduced in November 2021, which require pension providers to ask basic questions that can identify tell-tale warning signs of scams before customers transfer money out.

Previously, providers could face Ombudsman penalties if they delayed transfers, as this breached customers’ statutory rights.

“With more people organising their finances online, fraudsters now use the internet and social media”

If the questions about customer reasons and plans for transferring their pension indicate red warning signs of a scam, the statutory right to transfer can be over-ridden and the transfer banned.

Should a red flag be raised, the saver will need to take official scams guidance from Pension Wise before proceeding.


There are two types of investment cons. The first involves fraudsters posing as a legitimate firm and vanishing the moment you hand over your money.

The second is where victims are persuaded to get involved with fake or real investments which fail to deliver the promised returns or are so high risk you stand to lose everything. Many of these are long-term pension investments – which mean people who transfer in don’t realise something is wrong for years.

Pension scams have focused on things such as overseas property investments, airport car parks, storage units and renewable energy bonds. They can be dressed up to sound attractive, yet in reality the investments are highly risky or completely fictitious.

Pension scammers are also known for offering would-be victims a free ‘pension review’, or advice on how to cash in their savings. But this isn’t always what it seems. Though such moves are possible, they often leave savers with a huge tax bill, which of course the scammers don’t flag. So through a different channel, they wave goodbye to their hard-earned savings.

With more people organising their finances online, fraudsters now use the internet and social media. All they need is an online advertisement and fake website.


While it is hoped that the latest measures will have a positive impact, it’s still crucial to remain vigilant.

Tell-tale signs it’s a scam include phrases such as “loophole”, “pension liberation” or “guaranteed returns”, all of which should spark concern. Should you be offered a pensions review, never give your personal details, especially if someone offers to help you release cash from your pension and you’re under 55.

Other things that should ring alarm bells are 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. They might even ask you to grant them remote access to your devices.

If you’re worried about a financial scam you can report it to Action Fraud, the UK’s national reporting centre for fraud.

You can also contact the FCA’s helpline on 0800 111 6768 or use its reporting form:

Be aware, though, it’s notoriously difficult to get your money back, so take great care.


If you want to review your pension arrangements, talk to one of our trusted financial adviser today.


This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

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