Top tips of how to avoid pension scams

Pension Scams
The recent TV advertisement by the FSA really highlights the Great British pension scams scandal we face today. Figures show pension scam victims are losing £91,000 on average.

The recent TV advertisement by the FSA really highlights the Great British pension scams scandal we face today. Figures show pension scam victims are losing £91,000 on average.

The FCA say there could be up to 107,000 victims last year affected by pension scams.

FCA Pension Scams TV ad


Pension Scammers: How to avoid pension scammers before it’s too late

It can be hard to work out which companies are legitimate, and which aren’t. Some tactics such as cold-calling and knocking on people’s doors are clear and common signs of a pension scam. What do you do when faced with an advert on TV or social media, or a leaflet through the door or in a magazine, though? Genuine companies advertise, and so do some scammers.

To help, FCA approved pensions advice specialists Portafina highlights the one thing to do to ensure protection against a pension scammer, and five other things to look out for before it’s too late.

1 – Always Check the FSA register

The number one way to check if you are being scammed is to check the FCA register and see if the company or individual is regulated. Checking this database is the clearest and best way to see if a financial company or individual is regulated or not.

You can easily do this by searching the company or adviser’s name on the database and checking they are listed and their information matches what is on the register. For a step by step guide on how to check the register, please visit

2 – Watch out for ‘red light’ words

Lots of pension terms are unfamiliar, and most of us are used to accepting some jargon, (though we probably shouldn’t). Some terms, though, are very likely to cause trouble when relating to pensions.

A few words and phrases that should raise warning signs are:

  • Pension liberation
  • Cashback
  • One-off investment
  • Limited time offers
  • Loophole

3 – Avoid anyone who promises ‘guaranteed returns’

A company promising ‘guaranteed returns’ is likely to be a scam. The investments may be overseas where there is no consumer protection and typically promise a high guaranteed rate of return. Investments are never guaranteed. If it looks too good to be true, it probably is.

4 – You almost certainly can’t access your pension before you are 55

If a company tells you that you’re able to access your pension even though you’re under 55 then you should be very wary. You can’t access your pension before you are 55 without facing a huge tax bill, except for a few very specific circumstances such as terminal illness.
If you transfer your pension with a company who promises early access you could be hit with a tax penalty that, together with their fees, could cost you your entire pension pot!

5 – Don’t be pressured into making a quick decision

If a company is pushing you into making a quick decision its likely to be a scam. Don’t rush any decisions as it could have a long lasting and damaging impact on your future. Pensions are complicated and it’s a big decision, so take your time. If you have any doubts, then find a different independent financial adviser to give you advice.

6 – Ask lots of questions

A legitimate company will be happy to answer as many questions as you have. Asking questions will also help you to identify if you are being scammed or not.

Some good questions to ask are:

What is your FCA registered number?

  • Can I call you back? Reputable companies will be happy to do this whereas scammers tend to be more reluctant to give out contact details
  • How long have you been a financial adviser or company?
  • Can I visit your offices?

Jamie Smith Thompson, managing director of pension advice specialists Portafina, said: “Making decisions involving your hard-earned pension is never a decision that should be taken lightly or rushed, and the fact that there are people actively trying to scam people out of their pensions shows that we should all be exercising extreme caution.

“The new FCA and Pensions Regulator campaign has really got people thinking and talking more about pensions. Yet, our experience is that it has resulted in people complaining about the government’s dealing with the State Pension, rather than tackling the pension scams at hand. Real action needs to be taken to ensure better security of pension funds.

“Having said that, the campaign is a positive starting block and a step in the right direction when it comes to creating more awareness about scams.

“If you do decide you want to make a change to your pension pot, make sure you’re speaking to someone who knows what they’re doing, can clearly explain your options to you and will give you the time you need to make the right decision. Most importantly, check that they are a regulated specialist by making use of the FCA register!”

To find out more about identifying scammers from legitimate financial advisers, visit:

Follow Us

Follow us on Social Media