Beware of pension scams

Gentleman sitting at a desk with is hands covering his face struggling. He is sitting at a desk with lots of paperwork in front of him

New research suggests that 42% of pension savers, which would equate to over 5 million people across the UK, could be at risk of falling for at least one of six common tactics used by pension scammers. So how you can you protect yourself and your pension, let’s take a look.

The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) are joining forces again this summer to warn the public about fraudsters targeting people’s retirement savings. The likelihood of being drawn into one or more scams increased to 60% among those who said they were actively looking for ways to boost their retirement income.

The research also found that those who consider themselves smart or financially savvy are just as likely to be persuaded by these tactics as anyone else – so it could happen to you.


Honey Langcaster-James, a psychologist, stated:

‘Most people are confident in their ability to avoid being scammed. We tend to assume that it would never happen to us because we think we’d notice something if it wasn’t right. But even the smartest and savviest among us can become victims of crimes, and we do often have a ‘blind spot’. Sophisticated scammers take advantage of this and use powerful psychological techniques to build trust and rapport and ultimately to influence our behaviour.’


How is it happening?

The persuasive tactics used by fraudsters include pension cold calls, free pension reviews, claims of guaranteed high returns, exotic investments, time-limited offers and early access to cash before the age of 55.

The research showed that pension savers were tempted by offers of high returns in investments such as overseas property, renewable energy bonds, forestry, storage units or biofuels. However, exotic or unusual investments are high-risk and unlikely to be suitable for pension savings.

Helping savers to access their pensions early also proved to be a persuasive scam tactic. With one in six (17%) 45-54-year-old pension savers saying they would be interested in an offer from a company that claimed it could help them get early access to their pension. It is worth noting that accessing your pension before 55 is likely to result in a large tax bill for the saver. Unauthorised payments from your pension before 55, will mean paying 55% tax.

Despite the government’s ban on pension cold calls, 23% of those surveyed said they’d talk with a cold caller that wanted to discuss their pension plans.


The financial impact

Victims of pension fraud reported in 2018 that they had lost an average of £82,000. Pension fraud can be financially devastating for people. Potentially leaving consumers with insufficient income in retirement. Affecting their quality of life and also, in some cases, their mental wellbeing.


Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, said: 

‘It doesn’t matter the size of your pension pot – scammers are after your savings. Get to know the warning signs, and before making any decision about your pension, be ScamSmart and check you are dealing with an FCA authorised firm.’


Protect yourself from pension scams

  1. Reject unexpected pension offers whether made online, on social media or over the phone
  2. Check who you’re dealing with before changing your pension arrangements – check the FCA Register or call the FCA contact centre on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA
  3. Don’t be rushed or pressured into making any decision about your pension
  4. Consider getting impartial information and advice

You can also test how ScamSmart you are by taking a new quiz on the FCA ScamSmart site. Visit to find out more.


How we can help

If you are looking for support with your retirement plans or wish to understand how you could utilise your pension to create a brighter future, then MRA Ltd, the other side of our business, offer a 1-hour complimentary consultation. Come and have a chat with one of Life Centred Financial Advisers who will listen to your concerns, your ambitions for your life and discuss how we can provide assistance. It’s never to early to start planning for retirement, don’t get caught out by a scammer, contact MRA Ltd today to find out what might be possible for you.

Mike Robertson Associates Limited (MRA Ltd) is an appointed representative of Lighthouse Advisory Services Limited which is authorised and regulated by the Financial Conduct Authority. See here for full details.


Further information

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MRA help individuals, businesses and families achieve the best quality of life they can with the resources they have. MRA specialise in corporate solutions, cash-flow analysis, life centred planning and much more.

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