Don’t get scammed out of your Pension Savings!

This April sees the biggest reforms in decades hitting UK pensions, with George Osborne last year declaring freedom and flexibility of access to pension savings. Despite the controversies and confusion surrounding the pension freedoms, a bigger red flag has been raised around the issues of pension scams.

A recent study by insurance provider Phoenix Group found that 45% of pension savers have already been contacted by unregulated outfits looking to scam them out of their pension funds by offering ‘one off investment opportunities’ or ‘early unlocking of cash’.

The flexible rules around income drawdown means that people believe these scammers to be telling the truth, when in actual fact they could end up losing the majority, if not all of their pension funds. If they aren’t taken unlawfully by a scammer, then you could be hit with a large tax bill for ‘unauthorised transfers’, resulting in most of it being wiped out this way.

While pension freedoms have been celebrated by those who felt annuities were an unfair retirement income option, it is always worth considering an annuity anyway. They are still the option that provides the most security in retirement with an income for life, with no risk of falling income or dwindling funds later in life. If you do decide to go with an annuity then be sure to Compare your annuity rate online for free and also to speak to an independent financial advisor before you decide drawdown or another income option is best for you.

Scammers’ Signals

If you’re worried about being approached by a scammer, here are the signals to look out for to avoid bogus pension schemes:


Many of the phrases that scammers use to make you transfer your cash can sound very convincing. They’ll try and reassure you with phrases such as ‘one-off investment opportunities’, ‘free pension reviews’, ‘legal loopholes’, ‘cash bonus’ and ‘government endorsement’. You can learn more about your options using the government’s new Pension Wise scheme, but the only professional advice you should follow should be from a regulated IFA.

You can see whether a financial expert is regulated by checking their credentials with the Financial Conduct Authority (FCA). If they are registered, rest assured that they should have your best interests at mind. –

Investment Opportunities

Particularly with the freedoms coming into effect, it’s not entirely unfeasible that a ‘one-off investment opportunity’ could be a real prospect. In fact, an IFA may even recommend specific investment opportunities to help make the most of your pension savings. But any investment opportunity offered by a non-regulated financial expert will more than likely be a scam. Many may offer you a small percentage of your savings up-front, with the promise of a return later down the line. These investments could be overseas too, making it even more difficult to recover any funds lost. If you’re being rushed to transfer a pension fund, be aware!

Early Access to your Pension Savings

Is it possible to access your pension savings before the age of 55?


Do scammers still successfully con people by promising them this?

Unfortunately so… Only under very rare circumstances will you be permitted to access any pension savings you have before the age of 55. This is usually down to extreme, life-threatening or terminal illness. If someone tells you they can unlock your pension savings early – don’t listen!

Unsolicited Contact

If you’re approached by somebody out of the blue offering any of these things, or using any of these terms then be aware. They could approach you over the phone, via text message or email, or even in person door to door. Always be cautious, ask for documentation and proof, and then check whether they are regulated by the FCA.


Once the pension fund has been transferred, it is too late. Even if you do not lose all, or the majority of your pension fund, many victims will be subjected to large tax charges due to unauthorised payments or transfers.

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