We all like to think that we’re savvy when it comes to money - but could you really spot a scam if your life savings depended on it?

New figures from Action Fraud, the government service for the reporting of cyber crime, suggest a worrying number of us cannot. More than £30m has been reported stolen by savers as a result of pension scams since 2017 and the agency believes this may be an underestimate as tragically some victims may not even understand that they have been ripped-off.

In particular, Action Fraud is concerned about fraudsters offering free “pension reviews” to individuals which turn out to be schemes for funnelling their pension savings into either highly inappropriate investments that soon fail, or simply for stealing the money outright.

Scams like this have continued despite the introduction last year of a complete ban on unsolicited calls offering pension "deals". Any firm found flouting the rules faces a fine of up to £500,000, but experts suggest fraudsters are ignoring the ban.

These are the cruellest of financial crimes - fraud which robs people of pension savings they have built up through years of working, often on the eve of their retirement.

And it is men in their fifties - who typically have larger pension pots and are often already on the lookout for investment opportunities for their money - who are more likely fall victim to scams, Action Fraud said. Overconfidence may be an issue among this group, with nearly two thirds (65%) saying they’d be confident in spotting a scam approach but 4 in 10 (39%) also putting themselves at risk by engaging with common scam tactics such as time-limited investment opportunities or offers of guaranteed high return on their savings.

Criminals have taken advantage of peoples’ confusion around the regime for pensions, which changed in 2015 to make it simpler for people to access their pension money flexibly as they approach retirement. In order to take advantage of these “Pension Freedoms” individuals may legitimately be required to transfer their pension money to new companies, as well as making decisions about how their money is invested.

In amongst all that legitimate activity, fraudsters have risen up to exploit misunderstanding of the rules and confusion about investing. A typical ruse - as described by the regulators - goes like this: 

  • A company makes contact unexpectedly about your pension via phone, post, email or via social media, perhaps offering a free ‘pensions review’;
  • They promise guaranteed high returns and downplay the risks;
  • The investment opportunities they describe are unusual or overseas and aren’t regulated by the FCA - overseas hotels, forestry, green energy schemes;
  • They put you under pressure to make a quick decision, for example with time-limited offers, and send a courier round with paperwork to sign;
  • They claim to be able to unlock money from your pension - something which is normally only possible from age 55.

This is just one possible scenario. Fraudsters are experts at adapting to changes in public awareness, always looking for a new angle to exploit. 

But individuals can help to protect themselves. A vital step to take before retirement savings are accessed to is to seek out the official help that is available. The Government’s Pension Wise service offers free, impartial guidance to help you understand your options at retirement. You can access the guidance online at www.pensionwise.gov.uk or over the telephone on 0800 138 3944.

Beyond that, following these rules will make the lives of scammers much harder:

  1. Treat all unsolicited contact by companies with caution, even if you’ve been a customer for years and the call, text or email confirms basic information about you. 
  2. If you are unsure about a company that has contacted you, break off and attempt to re-contact the company by other channels. Use contact details you find for yourself, rather than relying on the details you’ve been given.
  3. You can check the authenticity of financial companies on the Financial Conduct Authority’s online register or call the FCA contact centre on 0800 111 6768 where there will also be certified contact details for genuine companies.
  4. If asked, never give up security details such as telephone banking passcodes, PINs or login details. 
  5. Don’t be rushed into action. A common tactic is to push victims into handing over details or transferring money with the threat that failing to act will be mean a bigger fraud will take place, or perhaps that a great investment opportunity will be missed. If in doubt, stop and take measures to verify the circumstances.
  6. If it sounds too good to be true, it is. Investments offered without a proper presentation of the risks attached are, at the least, breaking regulations and may be entirely fraudulent. Reputable pension companies should make it easy for you to establish that they are genuine and will operate strong anti-fraud policies. For example, Fidelity will never ask for your full PIN or online password on email or the phone, or call you to offer investment opportunities.  

As a firm authorised and regulated by the Financial Conduct Authority, Fidelity always holds a significant amount of liquid capital and is required to separate client money and assets from our own resources.

Read more on how to stay secure online


Important information

The value of investments and the income from them can go down as well as up, so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55. This information is not a personal recommendation for any particular investment.