How to Spot a Pension Scam: A UK Guide to Protecting Your Retirement Savings
Protect your life savings. Our latest guide reveals the latest pension scam tactics, warning signs, shocking statistics, and what to do if you're targeted.
You’ve worked hard for decades, diligently saving into a pension to secure a comfortable future. But for sophisticated criminals, your retirement pot represents a high-value target. Pension scams are on the rise, using increasingly clever psychological tactics to trick people out of their life savings, with devastating consequences.
At Plouta, our mission is to empower you with the knowledge to protect your money and safeguard your future. This guide is designed to be your first line of defence. We will explain the most common scam tactics, highlight the critical warning signs, provide the latest statistics on the scale of the problem, and give you clear, actionable steps to protect your hard-earned pension.
What you will learn in this guide: ⤵
The Shocking Scale of Pension Scams: How many people are affected and the amounts lost.
Common Scam Tactics: From "free pension reviews" to high-pressure sales.
The Red Flags: Clear warning signs that should set alarm bells ringing.
How to Protect Yourself: The four simple steps to stay safe.
What to Do If You Suspect a Scam: Who to report to and where to get help.
The Reality Check: The Shocking Scale of Pension Scams in the UK
Pension fraud isn't a niche problem; it's a widespread threat affecting millions. Understanding the scale can help reinforce the need for vigilance.
Widespread Targeting: Research from leading providers like LV= suggests as many as 7.3 million UK adults may have been targeted by potential pension scammers in the last year alone.
Significant Financial Losses: Data reported by Action Fraud reveals the devastating impact.
In 2023, Action Fraud received 559 reports of pension fraud, with total reported losses of £17.8 million.
The average loss per victim was a staggering £46,959 – life-changing sums of money.
A Pervasive Threat: One report from WEALTH at work highlighted that pension scams had hit 13% of UK adults in the past year as part of a wider financial fraud landscape.
The Shocking Scale of Pension Scams
Recent data reveals the widespread threat to UK retirement savings.
These figures show that anyone with a pension can be a target, and scammers are having success. They are professional, persuasive, and know how to exploit people's hopes and fears about their retirement.
Common Pension Scam Tactics to Watch Out For
Scammers are constantly evolving their methods, but they often rely on a few core, deceptive tactics.
The Unexpected Contact (Cold Calling): You receive an unsolicited call, text, email, or social media message about your pension. Cold calling about pensions has been illegal in the UK since 2019. If you receive one, it is almost certainly a scam. Hang up immediately.
The "Free Pension Review": A classic tactic. A scammer offers a "free review" of your pension to check its performance. They will inevitably discover your pension is "underperforming" and recommend moving it to a scheme with "higher returns" – a scheme they control.
Promises of High or Guaranteed Returns: Scammers will promise returns that sound too good to be true (e.g., "guaranteed 8-10% annual returns"). Legitimate investments always come with risk, and returns are never guaranteed. If it sounds too good to be true, it always is.
Exotic or Unusual Investments: They will pressure you to transfer your pot into unregulated, high-risk investments that are often overseas and hard to verify. Common examples include overseas property developments, renewable energy projects, forestry, storage units, or cryptocurrency schemes.
Early Pension Release (Pension Liberation): Scammers claim they can help you access your pension cash before the age of 55 (rising to 57 from 2028). Unless you are in very specific circumstances of severe ill health, this is illegal. Taking your pension early will result in a huge tax bill from HMRC (up to 55%), on top of the scammer's fees, leaving you with almost nothing.
High-Pressure Sales Tactics: Scammers create a false sense of urgency. They will use phrases like "limited-time offer," "you'll miss out," or "everyone is getting in on this." They might send couriers to your door with paperwork needing an immediate signature. Legitimate financial professionals will never rush you into a decision.
🚩 The Red Flags: How to Spot a Scam
Train yourself to spot these warning signs. If you encounter any of them, stop and think.
Contact out of the blue about your pension.
The promise of guaranteed high returns.
Offers of "free" pension reviews.
Talk of loopholes, cashbacks, or loans from your pension.
Pressure to make a quick decision.
Being asked to transfer money quickly or to multiple accounts.
Contact details that are only a mobile number or a PO box address.
A company that isn't on the FCA Register, or whose details don't match the register's information exactly.
How to Protect Yourself: The Four Simple Steps
The Financial Conduct Authority (FCA) and The Pensions Regulator recommend a simple, four-step approach to protect your savings.
Step 1: Reject Unexpected Offers If you receive an unsolicited call, text, or email about your pension, the safest thing to do is ignore it or hang up. Don't engage in conversation.
Step 2: Check Who You're Dealing With Before making any changes to your pension, check that the firm or individual you're dealing with is authorised by the FCA.
Use the FCA's Financial Services Register: You can check it online or by calling their helpline on 0800 111 6768.
Beware of "Clones": Scammers often pretend to be a genuine, FCA-authorised firm. Double-check the contact details on the register (phone number, address, website) and use those, not the details the firm gives you.
Step 3: Don't Be Rushed or Pressured Take your time to make any decision about your life savings. A legitimate adviser will never pressure you. Be wary of time-limited offers designed to create panic.
Step 4: Get Impartial Information or Advice Before acting, get impartial guidance or regulated advice.
MoneyHelper (including Pension Wise): This is a government-backed service offering free, impartial guidance on your pension options.
Regulated Financial Adviser: A qualified adviser can give you personalised advice on the best course of action. Always ensure they are FCA-authorised.
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What to Do If You Suspect You've Been Targeted
If you think you've encountered a scam, or worse, have already transferred money, it's crucial to act quickly. Don't feel embarrassed – scammers are incredibly convincing, and anyone can be a victim.
Contact Your Pension Provider Immediately: If you've started a transfer, tell your provider you suspect a scam. They may be able to stop it.
Report it to Action Fraud: This is the UK's national reporting centre for fraud and cybercrime. You can report online or by calling 0300 123 2040. This is vital as it helps police track and stop scammers.
Report it to the FCA: Report the firm or individual to the FCA using their online reporting form or consumer helpline. This helps them warn other people about unauthorised firms.
In Scotland: Report directly to Police Scotland by calling 101.
Conclusion: Your Pension is Your Future – Keep It Safe
The threat of pension scams is real and can have life-altering consequences. However, by being vigilant and knowing the warning signs, you can build a powerful defence against fraudsters.
Always remember the golden rules: reject unexpected offers, check who you're dealing with via the FCA Register, take your time, and seek impartial guidance or advice. Your pension is the result of a lifetime of hard work. By treating it with the caution it deserves, you can ensure you are the one who enjoys your retirement, not a scammer.
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Disclaimer: This article provides general information about pension scams in the UK and is for informational and educational purposes only. It is not financial advice. The statistics and tactics mentioned are based on information available as of June 2025. Always check the official websites of the FCA, The Pensions Regulator, and Action Fraud for the most up-to-date guidance and warnings. If you are unsure about any pension-related decision, you should seek independent financial advice from a regulated professional.
