Top 10 Ways to Avoid Falling Victim of Pension Scams

13th June 2023

Pension scams have become prevalent, with fraudsters targeting individuals’ hard-earned retirement funds. It is essential to be aware of the tactics employed by scammers and take necessary precautions to protect your pension. This article will discuss the top 10 ways to avoid falling victim to pension scams.

Educate Yourself

One of the most effective ways to protect yourself from pension scams is to educate yourself about the different types of scams and how they operate. Stay informed about the latest scams and fraud techniques through reliable sources such as government websites, financial publications, and reputable blogs. Awareness of scammers’ red flags and common tactics will enable you to spot potential scams and take appropriate action.

Be Wary of Unsolicited Approaches

Scammers often approach individuals unexpectedly, offering pension advice or investment opportunities. It is crucial to be cautious when dealing with such unsolicited approaches. Legitimate financial advisors or companies typically do not reach out to potential clients without any prior interaction or request for information. If you receive an unexpected communication related to your pension, consider the following measures:

  • Verify Credentials and Reputation: Before sharing personal or financial information or considering any investment opportunity, thoroughly research the individual or company approaching you. Check their credentials, qualifications, and affiliations. Look for online reviews or testimonials from other clients. If the communication is from a financial advisor, ensure they are registered with the appropriate regulatory bodies, such as the UK’s Financial Conduct Authority (FCA).
  • Don’t Share Personal Information: Be cautious about sharing personal information, such as your National Insurance number, bank account details, or pension information, with unsolicited callers or through suspicious emails. Scammers often use such information to commit identity theft or gain unauthorized access to your finances.
  • Question Too-Good-to-Be-True Offers: Scammers may entice you with promises of high returns or exclusive investment opportunities. However, it likely is if an offer sounds too good to be true. Exercise skepticism and critically evaluate any investment proposal. Legitimate investments carry inherent risks, and excessively high returns often indicate fraudulent schemes.
  • Avoid Pressure Tactics: Scammers may use high-pressure tactics to rush you into making hasty decisions. They may claim limited availability or urge you to act quickly to secure the supposed benefits. Take your time, and don’t let anyone rush you into making financial commitments. Legitimate financial advisors understand the importance of careful consideration and will give you the time to make informed decisions.
  • Conduct Independent Research: Independently research the person, company, or investment opportunity. Look for reputable sources of information, such as government websites, financial publications, or established industry organizations. Cross-check the details provided by the unsolicited party to ensure their legitimacy.
  • Seek Second Opinions: If you’re considering a significant pension-related decision, such as transferring your pension or making a substantial investment, seek a second opinion from an independent financial advisor. They can provide an objective assessment and help you evaluate the risks and benefits associated with the opportunity. A qualified professional will prioritize your best interests and offer unbiased advice.

Check the FCA Register


Before engaging with any financial advisor or firm, check if they are authorized and regulated by the Financial Conduct Authority (FCA). The FCA register is a valuable resource that allows you to confirm the legitimacy of individuals and companies providing financial services. By checking the register, you can ensure that the person or firm you are dealing with has the qualifications and permissions to provide pension-related advice or services.

Avoid High-Risk Investments

Pension scams often involve high-risk investments that promise exceptionally high returns. Be cautious of any investment opportunity that sounds too good to be true or involves exotic or unregulated schemes. Such investments often carry a higher risk of fraud. Stick to reputable, regulated investment products aligning with your risk appetite and long-term financial goals. Consult a trusted financial advisor before committing if an investment opportunity seems suspicious or unfamiliar.

Be Skeptical of Pension Liberation Schemes

Pension liberation schemes offer early access to your pension before age 55, which is usually not allowed under normal circumstances. However, these schemes often involve significant tax penalties and charges, making them attractive to scammers. Be wary of any scheme that promises you early access to your pension funds. Consult a qualified financial advisor before considering any such scheme to understand the potential risks and consequences.

Beware of Mis-Sold SIPP Pension Transfers

Mis-selling of Self-Invested Personal Pension (SIPP) transfers is a significant concern in the pension industry. Scammers may exploit this by promoting fraudulent schemes disguised as attractive SIPP investment opportunities. To avoid falling victim to mis-sold SIPP pension transfers, follow these steps:

  • Understand SIPP Investments: Educate yourself about SIPP investments and the associated risks. A SIPP allows individuals greater control over their pension investments, but it also means taking on more responsibility. Be aware of the types of investments allowed within a SIPP and ensure they align with your risk tolerance and long-term financial goals.
  • Seek Independent Advice: Before considering a SIPP transfer, consult an independent financial advisor specializing in pensions. They can assess your current pension arrangements and guide you on whether a SIPP transfer suits you. An independent advisor will help you navigate through potential scams and ensure you make an informed decision.
  • Be Cautious of High-Risk Investments: Mis-sold SIPP pension transfers often involve high-risk and unregulated investments. Exercise caution if an investment opportunity with a SIPP promises unusually high returns or involves unconventional schemes. Take the time to thoroughly research the investment, assess the associated risks, and verify the legitimacy of the investment provider.
  • Check for Regulatory Compliance: Ensure that any firm or individual offering SIPP transfers is authorized and regulated by the Financial Conduct Authority (FCA). The FCA regulates and supervises financial services firms to protect consumers and maintain the integrity of the financial markets. Check the FCA register to confirm the legitimacy of the firm or individual providing SIPP transfer services.
  • Beware of Pressure Tactics: Scammers may use high-pressure tactics to persuade you to transfer your pension into a SIPP. They might claim that time is running out or create a sense of urgency to make you act quickly. Avoid making rushed decisions, and be wary of anyone who tries to pressure you into transferring your pension without thorough consideration.
  • Understand the Fees Involved: Missold SIPP transfers often come with exorbitant fees and hidden charges. Before proceeding with a SIPP transfer, carefully review and understand the fees associated with the transfer and ongoing management of the SIPP. Legitimate advisors will be transparent about the fees involved and help you understand the impact on your pension.

Protect Personal Information

Scammers may attempt to gather sensitive details such as your National Insurance number, bank account information, or work pension compensation details. Never disclose personal or financial information to unsolicited callers or in response to suspicious emails or messages. Be cautious when sharing any personal information, and keep it secure. Legitimate financial institutions will never ask for your sensitive details over the phone or via email.

Seek Independent Advice


Consult an independent financial advisor not affiliated with any specific investment or pension scheme. Independent advisors must act in your best interests and can provide unbiased guidance tailored to your specific needs and circumstances. They can help you understand the risks of different investment options and recommend suitable strategies to protect and grow your pension funds.

Conduct Due Diligence

Before making any investment or transferring your pension:

  • Conduct thorough research on the investment product, company, or scheme involved.
  • Look for reviews, seek professional advice, and assess the potential risks and benefits.
  • Take your time to make an informed decision and avoid rushing into any financial commitments.

It is crucial to gather as much information as possible and evaluate the credibility and track record of the investment opportunity.

Report Suspicious Activity

If you suspect that you have been targeted or fallen victim to a pension scam, report it immediately to Action Fraud in the UK. Reporting such incidents helps authorities track down scammers, prevent further fraud, and protect others from becoming victims. By reporting suspicious activity, you contribute to the overall efforts in combating pension scams and ensuring a safer environment for all individuals.

Final Thought

Protecting your pension from scams requires vigilance, awareness, and caution. Following the top 10 ways outlined in this article can reduce the risk of falling victim to pension scams. Stay informed, seek professional advice, and be skeptical of unsolicited approaches. Safeguarding your pension is crucial to ensure a secure and comfortable retirement.