A video from the Financial Conduct Authority (FCA) very briefly and powerfully shows how easy it to be taken in by a pension scam.

Bob, who is 57, lives with his wife Cathy. The couple have two children and five grandchildren. Bob has worked for 40 years but suspected his pension wasn’t going to be enough for his retirement. When he received a phone call out of the blue from somebody offering him a free pensions review, Bob jumped at the opportunity.

“He knew me by name and spoke professionally about investments,” says Bob. “He seemed like a really decent guy.”

The scammer disappeared with all of Bob’s pension savings…

Don’t let a scammer enjoy your retirement – find out how pension scams work, how to avoid them and what to do if you suspect a scam.

Here’s some useful information from the FCA:

Pension scams can be hard to spot. Scammers can be articulate and financially knowledgeable, with credible-looking 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. Or they may be introduced to you by a friend or family member who is also unknowingly being scammed. Scammers will make false claims to gain your trust. For example:

  • Claiming they are authorised by the 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 then often:

  • Invested in unusual and high-risk investments like overseas property, renewable energy bonds, forestry, storage units. 
  • Invested in more conventional products but within an unnecessarily complex structure which hides multiple fees and high charges.
  • Stolen outright.

The warning signs

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 (this happened to Bob).
  • 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.
  • Arrangements where there are several parties involved (some of which may be based overseas) all taking a fee, which means that the total amount deducted from your pension is significant.
  • Long-term pension investments – which mean it could be several years before you realise something is wrong.

Four simple steps to protect yourself from pension scams 

Step 1 - Reject unexpected offers

If you’re contacted out of the blue about a pension opportunity, chances are it’s a high risk or a scam.

If you get a cold call about your pension, the safest thing to do is to hang up - it’s illegal and probably a scam. Report pension cold calls to the Information Commissioner’s Office (ICO).

Be wary if you’re contacted about any financial product or opportunity and they mention using your pension.

If you get unsolicited offers via email or text you should simply ignore them. Fortunately, most people do reject unsolicited offers – FCA research suggests that 95% of unexpected pension offers are rejected.

Be wary of offers of free pension reviews (such as the one Bob was offered). Professional advice on pensions is not free – a free offer out of the blue is probably a scam. And don’t be talked into something by someone you know. They could be getting scammed, so check everything yourself.

Step 2 - Check who you're dealing with

Check the FCA Financial Services Register to make sure that anyone offering you advice or other financial services is FCA authorised, and they are permitted to provide those services in relation to pensions.

Check they are not a clone – a common scam is to pretend to be a genuine FCA-authorised firm (called a ‘clone firm’). If you use an unauthorised firm, you won’t have access to the Financial Ombudsman Scheme or Financial Services Compensation Scheme, so you’re unlikely to get your money back if things go wrong.

Step 3 - Don't be rushed or pressured

Take your time to make all the checks you need – even if this means turning down an ‘amazing deal’. Be wary of promised returns that sound too good to be true and don’t be rushed or pressured into making a decision. 

Step 4 - Get impartial information or advice

You should seriously consider seeking financial guidance or advice before changing your pension arrangements.

If you are looking for an adviser, make sure that they are registered with the FCA, as this will give you additional peace of mind. At The Goodman Partnership we are registered with the FCA and have other accreditations too, which you can view on our website.  We have been based in Tunbridge Wells for over 30 years and would be delighted to assist you with your retirement and wealth management planning.


Goodman Chartered Financial Planners is a trading name of Fairstone Financial Management Ltd. Fairstone Financial Management Ltd., is authorised and regulated by the Financial Conduct Authority – FRN: 475973 Registered in England and Wales no: 05574120. Part of the Fairstone Group. Where you have a complaint or dispute with us and we are unable to resolve this to your satisfaction then we are obliged to offer you the Financial Ombudsman Service to help resolve this. Please see the following link for further details: www.financial-ombudsman.org.uk.