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All types of financial scam can have devastating consequences, but losing your retirement savings to fraudsters is particularly terrifying.
Many people pay into their pensions for decades in the hope of enjoying a comfortable retirement but, if targeted by scammers, can find their savings drained, leaving them facing an uncertain future. Latest available data shows there were 519 reports of pension fraud made to Action Fraud between October 2024 and March 2025, and £17,567,249 lost in total, with average losses of £33,848 per person.
Pension scams typically involve fake promises of guaranteed investment returns or offer savers early access to their pensions.
Dean Butler, Managing Director for Retail Direct at Standard Life said: “Put simply, a pension scammer will try to trick you into handing over your pension savings. This could involve you transferring your pension pot into a non-existent or high-risk scheme, or being persuaded to release some or all of your pension pot. Scammers often try to tempt their victims with offers of better returns, one-off opportunities, or access to their pension savings before the minimum pension age of 55.
“Unfortunately, if you fall victim to a pension scam, it’s likely you’ll find it very difficult to get your money back. It’s therefore incredibly important to understand how pension scams work, how to spot the warning signs, and what to do if you’re not sure something is genuine. This could help you protect your savings and avoid becoming a victim in the future.”
How to spot a scam
With fraudsters becoming ever more sophisticated, and the line between outright fraud, and those selling vastly overpriced, unsafe investments blurring, would you know how to spot a scam?
Online pension provider Pension Bee’s ‘Scams Awareness Report’ found that up to two thirds of people failed to identify some of the most common pension scams, including offers of early pension access and free pension advice.
Those who do fall victim to pension scams risk losing decades worth of savings within just 24 hours, according to the FCA’s and the Pensions Regulator’s joint ScamSmart campaign.
Their research found that no-one is safe, and in fact the more educated you are, the more likely you are to fall victim to a pension scam. For example, those who have a university degree are 40% more likely to accept the offer of a free pension review, a tactic often used by fraudsters, than those without one.
Charles Counsell, Chief Executive, TPR, said: “Scammers wreck lives and no matter how big or small your savings are, every pot is a target. It may seem tempting to make a change to your pension fund now, but it’s important not to rush.”
Under regulations set by the Department of Work and Pensions (DWP), if there are signs that a scheme you’re considering transferring to might be a scam, trustees and managers can intervene and delay or stop the transfer until the new scheme has proved its credentials. You can read more about these laws in our article Government introduces measures to prevent pension scams.
Here, we explain how to spot a scam and what to do if you’re a victim.
Common types of scam – and how to spot the warning signs
There are lots of tricks fraudsters use to try to part you from your retirement savings. Here are some of the most common types of scam and some of the warning signs you need to watch out for. You can learn about other scams that are currently doing the rounds in our guide Types of scam and how to avoid them.
Pension review scams
With this type of scam, you’re offered a free pension review. Once you agree and hand over details of your current pension arrangements, the scammer will then recommend you transfer your money either into a high-risk scheme, or investments which simply don’t exist. You’re unlikely to see your retirement savings again.
The warning signs: You’re contacted out of the blue and offered a pension review or free help managing your pension.
Boiler room scams
You’ll be called out of the blue and told about an investment opportunity that you can’t afford to miss. Scammers may have found your name on shareholder registers of listed companies, which are publicly available. Firms running this type of scam often operate from overseas but will usually have a UK business address to convince you they’re legitimate.
Often you’ll be told that your pension will be invested in unusual investments such as overseas property, diamonds, forestry or storage units which offer supposedly lucrative returns.
Once you’ve handed over your pension pot, not only are you very unlikely to receive the returns you’ve been promised, but you won’t get your retirement savings back either.
The warning signs: You’re offered too good to be true returns on your pension savings, or a ‘one-off’ investment opportunity, and you’re put under pressure to make a decision quickly.
Pension liberation scams
Companies offer you a ‘loan’, ‘savings advance’ or ‘cashback’ from your pension, telling you that you’re free to access your retirement savings before the age of 55. If you are victim of this type of scheme, you’ll not only have to pay a hefty tax charge to the Government, at least 55% but sometimes as much as 70% of your pension pot, but you’ll also have fees taken from your pension for the transfer, which can be 20% or more of your pension savings.
The warning signs: You’re told that you can release cash from your pension early, even though you’re under the age of 55 (the earliest age you can usually take your pension benefits)
Why we fall for scams
There are lots of reasons we fall for scams.
Many people are currently struggling to manage steep living costs, so might be looking for ways to give their pension pot a boost in the run up to retirement.
Returns offered by scammers are usually much higher than those you can earn through your bank, so it’s entirely natural to feel tempted to take some of your savings out, especially as fraudsters often sound very authoritative or claim to be experts in their area.
Honey Langcaster-James, a psychologist, said: “Scammers employ clever techniques, such as seeking to establish ‘social similarity’ by faking empathy and a friendly rapport with their victims. They can win your trust in a short space of time and by engaging with them you leave yourself vulnerable to losing a lot of money very quickly.”
It can also be difficult to detect what’s a scam and what’s real, especially as fraudsters now use sophisticated technology including AI to develop plausible websites to convince us we’re being offered a genuine opportunity.
How to avoid scams and protect yourself from scammers
To make sure your lifetime savings stay yours, it’s important to follow these four simple steps:
- Never accept any unsolicited offer to review your pension, even if the person who’s contacted you sounds plausible.
- Don’t be rushed or pressurised into making any decisions regarding your pension, even if you’re told it’s a ‘time-limited offer’.
- If you are planning to change your pension arrangements, always check that any firm you’re dealing with is authorised by the Financial Conduct Authority. You can do this by checking the FCA Register or by calling the FCA helpline on 0800 111 6768.
- You should also get impartial information or advice before making any significant changes to your pension. If you have a regulated financial adviser, it can be helpful to speak with them in the first instance. If you don’t have one, then the government-supported Money and Pensions Service provides free independent and impartial information and guidance. If you’re aged 50 or over, you can also speak with Pension Wise, another government-supported resource that offers free and impartial guidance about your pension options. You can find a local financial advisor on VouchedFor or Unbiased if you want personal recommendations or advice about your specific circumstances.
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What to do if you think you’ve fallen victim to a pension scam
If you suspect a scam having agreed to transfer your pension, contact your pension provider immediately and ask if they can stop the transfer.
If you think you’re too late and you’ve already been caught out by a pension scam, contact Report Fraud either online or by calling 0300 123 2040. Report Fraud is the UK’s national reporting centre for fraud where you should report if you have been scammed, defrauded or experienced cyber-crime.
You should also report what’s happened to the Financial Conduct Authority either online or by telephoning 0800 111 6768.
Don’t suffer in silence
Falling victim to fraud can not only be financially devastating but can also have a huge emotional impact. Victims often feel foolish and humiliated and don’t want to admit what’s happened to family or friends, even when they are entirely blameless.
If you need to talk to someone about how you’re feeling, contact Victim Support either online or via their support line on 0808 1689111, or Think Jessica, a charity committed to protecting older people from fraud and scams. You can also contact The Samaritans at any time of the day or night on 116 123.
If a pension scam has left you struggling financially, contact Citizens Advice to help you find a way forward. You can speak to an adviser through its national phone service Adviceline, on 03444 111 444, which is available from 9am to 5pm Monday to Friday.
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