What Is Pension Fraud and How Do You Spot It?

Mark Benson

Mark Benson

Money Savings Advice What Is Pension Fraud and How Do You Spot It

Unfortunately, while regulators have tightened laws regarding pension advice, pension fraud is still prevalent. If you believe you have been approached by fraudsters seeking to take control of your pension assets, you should contact the authorities. It is important that you do not sign any documentation without seeking additional guidance.

There have been some very useful changes in pension fund regulations in recent years. While this has been welcome, it has caused some confusion with those unable to keep up with ongoing changes.

Unfortunately, on occasion, this has left an information vacuum for the fraudsters to exploit, often to significant financial distress for those on the receiving end.

So, what are the signs of pension fraud, and what can you do?

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What Should I Do if Approached by an Unsolicited Pension Adviser?

Whether you have a works pension or a personal pension, you should have an adviser in charge of those assets and someone to contact. So, if you receive an unsolicited approach from a “pension adviser,” proceed with extreme caution.

They will often promise the world, early release of funds, and unfortunately, many people are taken in by these lies. If in doubt, contact your financial adviser.

Is There a Website I Can Check for Fraudulent Activity?

The FCA has introduced a very useful scam smart service which allows you to check whether an opportunity is a pension scam. It may be that it is a perfectly legitimate activity they are recommending, but why are they contacting you without an invitation?

The website address is: https://www.fca.org.uk/scamsmart

Can Pension Experts Cold Call Individuals?

Interestingly, since January 2019, it has been illegal for advisers to approach an individual by phone, text, in person, or email without an invitation. Therefore, under no circumstances should you be approached by so-called “pension experts” without inviting them first.

Even if they are a perfectly legitimate company, what kind of reputation do they have if they are willing to break the law? Alarm bells should start ringing!

The Pension Adviser Has a Website; Surely, It Must Be Legitimate?

Well, if you dig a little deeper on some of the eye-catching fraudulent pension advice websites, you may see a lot of similarities. The contact details of the website may incorporate a mobile phone number and a PO Box address - difficult to find the website owner if you need to?

Many pension fund fraudsters will set up eye-catching websites as they attempt to fleece as many pension holders as possible. Also, alarm bells should start ringing if the number you are given to call back is either dead or does not take incoming calls. How would you contact them if you had an issue?

Low Risk/High Return Pension Fund Opportunities, Who Could Turn Them Down?

If you strip out the emotion, personal views, and third-party comments, investment comes down to one formula, the risk/reward ratio. It is improbable, if not impossible, to guarantee huge returns without taking huge risks.

So, if you receive an unsolicited call about your pension scheme, promising huge returns for limited risk, you should at least do further investigation. There are many people who are “caught up in the moment” looking to maximise their pension scheme and future income.

Take a step back, consider the situation in the cold light of day and never feel rushed to sign on the dotted line.

The Pension Adviser Is Forcing Me to Make a Quick Decision

There are two different types of pension fraud, those which occur instantly and those where a relationship is built and then ruined. You will find that the fraudsters looking for a quick return will pressurise you to sign up. They will often mention limited places, imminent deadlines, and even promise additional similar investment proposals in the future.

Again, try not to get caught up in the moment, take a step back, and look at the situation from a distance. Does it make sense? Why do you have to sign up today?

Surely I Can Reclaim Pension Funds Lost as a Consequence of Fraud?

Not necessarily. There may well be situations where funds are intercepted quickly enough to stop them from leaving the country. Unfortunately, the vast majority of those who are tricked into signing over their pension assets will likely lose everything. Fraudsters often claim to be from the government, pension fund administrators, solicitors, and even well-known money advice websites.

As soon as you believe they are from a particular organization, it is easy to let your guard down, take everything on trust, and hand over your personal information on a plate. If your pension funds are transferred as a consequence of fraudulent activity, it is unlikely the fraudsters will have any regulatory approvals.

You may just have handed over your pension fund to an unknown party!

Money Savings Advice Tip

Sadly where there is money involved there are unsavoury people who look to take advantage. If you feel you have been the victim of pension fraud and have lost money from your pension then we advise you to speak to a professional who can manage your claim properly.

How Can I Protect Myself From Pension Fraud?

The key to protecting yourself from fraud is to maintain a degree of control of your assets. If you receive an unsolicited approach by a “pensions expert,” these should be treated with suspicion. Since January 2019, it has been illegal for third parties to contact you about pensions.

Next, you should check the FCA register and the scam smart website. Even if everything looks perfectly legitimate, it is strongly advisable to take independent financial advice from an FCA regulated firm. They may already be aware of such fraudulent activity.

Are There Really Ways in Which to Release Pension Funds Early?

While regulations change on a regular basis, for the vast majority of people, there will be no access to their pension funds until they reach 55. There may be some situations, the majority of which surround the health of the pension fund holder, where it may be possible to extract funds early.

These tend to be few and far between, and it is advisable to take professional financial advice at all times. Those who promise to find loopholes, ways in which you can release pension funds early, are often acting unlawfully at best.


Unfortunately, the revolution in the pensions industry, which began in the 1980s, has attracted fraudsters from across the world. Unsolicited approaches are now illegal and should be ignored. If a proposition looks too good to be true, then it probably is.

Never hand over control of your pension fund assets to unknown parties. It is vital to retain control of your own pension fund assets – always seek advice from trusted/regulated advisers.

How Can Money Savings Advice Help You With Making a Mis-Sold Pension Claim?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Financial Claims management companies. They have already helped thousands of people claim compensation for a mis-sold pension and they can do the same for you.

Choosing an independent claims management company means they won’t proceed with a claim unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these claim management companies who can help you make a compensation claim, then click on the below and answer the very simple questions.

Money Savings Advice Author Mark Benson

Mark Benson

Mark has been writing professionally for over ten years for the financial sector. Having started in the financial world as a stock-broker in central London and then moving to equities trader Mark is one of our senior financial writers who has a vast knowledge of multiple financial sectors.

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