Pension review scams

Be very wary if you are offered a ‘free pension review’ out of the blue and especially if you are then encouraged to move your pension to get better returns or release cash sums.

We are aware that people are being contacted unexpectedly and offered a free pension review. This could be a phone call, an email, text message or an offer in an online advert.

Most of the companies making these offers are not authorised by us, yet often falsely claim they are acting on our behalf. Many of them claim that they don’t have to be authorised by us as they aren’t providing the advice themselves, but this is not the case.

Some callers also claim to represent the Government’s free and impartial guidance service Pension Wise, set up to help individuals understand the retirement options available to them from the age of 50. The Pension Wise service will not cold call you.

Protect your pension

If you get cold-called, the safest thing to do is to hang up, as chances are the investment is very risky or a scam. If you get these offers via email, text or online adverts, it’s best to simply ignore them.

‘Free reviews’ offered out of the blue are designed to persuade you to move money saved in your existing pension pot to a high-risk scheme.

Your pension pot is then typically invested in unusual investments such as overseas property, forestry, storage units, care homes, biofuels or businesses you may not be familiar with. You may be promised guaranteed returns and/or a cash sum from your pension to tempt you to take up these offers.

Professional financial advisers offering advice that is impartial and in your best interests are very unlikely to cold call you offering their services. Professional advice on pensions is not free.

The risks

  1. Some of these investments are badly run, while others may be outright scams. As they are promoted as long-term pension investments, several years could go by before you realise something is wrong
  2. Where cash sums are released, you may have unexpected tax charges to pay, up to 55% of your payment. Find out more about pension unlocking
  3. You could lose some or all of your pension pot. While these investments may offer higher rates of potential returns, the returns are not guaranteed and the money you invest is at risk
  4. Unusual investments tend to be unregulated and high risk, and may be difficult to sell if you need access to your money
  5. Most of the companies making these offers are not authorised or regulated by the FCA. This means you may have no right to complain to the Financial Ombudsman Service or to claim compensation from the Financial Services Compensation Scheme if things go wrong

Always check that anyone offering you advice or other financial services is authorised by us and permitted to give advice on pensions: if they are, their name will appear on our Register.

What you should do next

If you have already moved your pension pot and have concerns, firstly contact any authorised firms that were involved. The Financial Ombudsman Service may be able to help if you cannot get the matter resolved with those firms.

  • If you are considering changing your pension arrangements, you should first seek impartial advice from a financial adviser unconnected to any firm that has contacted you offering a 'free review'. Find out more about financial advice
  • Visit Pension Wise to find out more information on your new pension options
  • Check our Register and only contact firms using the details that are listed there
  • Find out more information about how to be a ScamSmart investor – including what to do if you are, or have been, approached by an unauthorised firm
  • Download our Protect your pension pot leaflet, which gives you further information about what to be wary of when moving your pension to another arrangement
  • Find out more about how to spot pension scams on The Pension Regulator’s website

You can also see more information and guidance about pensions from the Money Advice Service and The Pensions Advisory Service, and find out more about early pension release.