Find out how pension review scams work, how to avoid them and what to do if you are scammed.
Pension review scams contact people unexpectedly, offering 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 offering free pension reviews are not FCA authorised, but may falsely claim they are.
They may also claim that they don’t have to be FCA authorised as they aren’t providing the advice themselves.
Some firms may falsely claim to be acting on behalf of the FCA or represent the Government’s free and impartial guidance service Pension Wise.
We are aware that scammers are targeting consumers searching for investments online, in particular through search engines like Google and Bing. Those offering or promoting products or investment opportunities found through search engines are not necessarily authorised or regulated by the FCA. You can check the FCA Warning List for firms to avoid.
How pension review scams work
Investors are often called out of the blue, but contact can also come by email, post, word of mouth or at a seminar or exhibition.
Free pension reviews are designed to persuade you to move money in your pension pot into a high-risk scheme.
Your pension pot is then 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.
Some of these investments are badly run, while others are outright scams.
As they’re promoted as long-term pension investments, it could be several years before you realise something is wrong.
How to protect yourself
If you get a cold call about your pension, the safest thing to do is to hang up - it’s illegal and probably a scam. Report pension cold calls to the Information Commissioner’s Office (ICO).
If you get offers via email, text or online adverts, you should simply ignore them.
Be wary if you’re contacted about any financial product or opportunity and they mention using your pension.
Professional advice on pensions is not free – a free offer out of the blue is probably a scam.
Always check that anyone offering you advice or other financial services is FCA authorised and permitted to give advice on pensions.
The first step is to check if their name appears on our Register.
If the firm is on our Register, the next step is to call our Consumer Helpline on 0800 111 6768 to check the firm is permitted to give pension advice.
If you don’t use an FCA-authorised firm, you also won’t have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) so you’re unlikely to get your money back if things go wrong.
Unusual investments tend to be unregulated and high risk, and may be difficult to sell if you need access to your money. You could also lose some or all of your pension pot.
Where cash sums are released, you may have to pay up to 55% of your payment in tax – read more about pension unlocking.
Always be wary if you’re contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true.
You should seriously consider seeking financial advice or guidance before investing. You should make sure that any firm you deal with is regulated by us and never take investment advice from the company that contacted you, as this may be part of the scam.
What you should do next
If you have already moved your pension pot and have concerns, contact the firm involved and ask for your money back. The Financial Ombudsman Service may be able to help if you can’t resolve the matter.
If you’re considering changing your pension arrangements, you should:
- get impartial advice from a financial adviser unconnected to the firm offering a free review – find a financial adviser
- check the firm is listed on our Register – only use the contact details listed on the register
- find out more about early pension release
- read more about how to avoid pension scams
- find out more about pensions from Pension Wise, the Money Advice Service and The Pensions Advisory Service.
If you have been scammed
If you have already invested in a scam, fraudsters are likely to target you again or sell your details to other criminals.
The follow-up scam may be completely separate or related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee.
If you have any concerns at all about a potential scam, contact us immediately.