Don’t get scammed out of your pension

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Pension scams have been around for some time, but the pension freedoms that came into force on 6 April(Opens new window) potentially make the over 55s a soft target. So if you fall into this category it’ll pay to stay alert.

You now have full access to your pension savings from the age of 55 and there are all manner of criminals and con artists looking to take advantage of the new rules and part you from your money.

To make sure you don’t fall into a costly trap, take time to really consider any decision to withdraw cash from your pension to invest it in something new. Some investments may seem exciting and unusual, often offering high guaranteed returns, but if it seems too good to be true then it probably is.

Often these are unregulated investments sold by unregulated advisers and if things go wrong you won’t be protected by the Financial Ombudsman Service or the Financial Services Compensation Scheme.  If you’re at all unsure then take advice from a regulated financial adviser(Opens new window) before making a move.

It’s easy to think of fraud as something that happens to other people, but the growing number of headlines proves this isn’t the case and the Tonight programme highlighted the problem(Opens new window).

This issue is so endemic that both the Financial Conduct Authority(Opens new window) and the Pensions Regulator(Opens new window) are trying to raise awareness of potential scams and ways to avoid them.

To protect yourself from fraudsters the biggest thing to focus on is how you respond to any unsolicited contact. Whether it comes via post, email, text or telephone you should immediately be wary of anything that arrives from out of the blue.

If you’re in any way uncomfortable, then the safest thing to do is to hang up the phone or delete the message. Be careful about using the unsubscribe option as this can alert fraudsters that they have the right contact details. Even if you decide to read on or speak to the caller, it’s important to remember that you’re in the driving seat.

Don’t feel pressured into making a snap decision or acting immediately and do your research on the company that’s contacting you. Ask for the firm’s registration number and get contact details. Have a look at the Financial Conduct Authority’s warning register(Opens new window) and do some online research into the business and its directors.  

If you go ahead, then scrutinise every document before you sign and make sure you understand the tax implications of what you’re about to do. If, for example, you inadvertently transfer your pension overseas and you live in the UK, you may need to pay a 55% tax charge, in addition to other fees.

The pension rules are designed to give you more freedom and choice about what you do with your money. Once you hit 55 you have access to your whole pension pot and it’s up to you how and where you invest it.

As unexciting as it may sound, the most tax-efficient way of doing this, which will help the fund grow, is to leave it in your pension and take out only what your need. This also gives you the safeguards that come from staying in a regulated environment. If you start chasing rainbows, it’s unlikely you’ll find a pot of gold.

When you’ve spent so long saving into your pension, don’t let anyone rob you of what you’ve put aside for later life. Always be vigilant. 

Protect yourself from possible scams


  • Give out personal information when contacted out of the blue
  • Be rushed into anything
  • Sign anything unless you fully understand what you’re getting into
  • Let anyone into your home unless you’re sure they’re genuine


  • Research any firm that approaches you
  • Check the FCA warning register
  • Seek out regulated financial advice
  • Take your time
  • Assess the tax implications of any decision 
Photograph of blog entry author Kate Smith Regulatory Strategy Manager

Kate Smith

Regulatory Strategy Manager