10 signs that you may have been the victim of a pension scam

Pension scams have become a growing concern in the UK, with many individuals falling victim to fraudsters who promise unrealistic returns on investment. If the cost of living crisis has taught us anything, it’s that protecting your money and planning for later life could save you a lot of worry in the future. Even if you have fallen victim to a pension scam, it’s not too late to make a claim and put things right. Take a look at some of the biggest signs that you may have been the victim of a pension scam.

Unsolicited contact

If you receive a call or an email from an unknown person or company offering to help you invest your pension, consider this as a big red flag. Legitimate financial advisors do not cold call or email unsolicited investment offers.

High returns

Scammers often promise unrealistic returns on investment, such as 10% or more per year. While it is possible to make good returns on your pension, it is unlikely to be this high. Be wary of any investment offer that promises guaranteed returns. A more realistic return percentage would be around 4% of real return.

Pressure to act quickly

Scammers often use high-pressure tactics to get you to transfer your pension as soon as possible. They may tell you that the offer is only available for a limited time and that you need to act quickly. Don’t let anyone pressure you into making a decision about your pension without fully researching the offer.

Upfront fees

Scammers often charge fees to transfer your pension. Legitimate financial advisors do not charge upfront fees, and any fees charged should be reasonable and clearly explained to you. Big surprise costs delivered with vague reasoning should be an a huge red flag. Never send any money over to any financial advisor you don’t trust.

Unregulated company

The UK has a financial regulatory body called the Financial Conduct Authority (FCA) which regulates pension providers and financial advisers. Before transferring your pension, you can check that the company is registered with the FCA and has a good reputation. If the company is not regulated, this is a sign that it may be a scam.

Transferring to an overseas scheme

Scammers may ask you to transfer your pension to an overseas scheme, which can be difficult to regulate and harder to recover your funds from if something goes wrong. It could also come with an unauthorised tax charge of at least 40% when trying to access the funds, which is a huge loss of your pension pot.

Promising to release pension funds before age 55

In the UK, you cannot access your pension funds until you reach the age of 55. If someone promises to release your pension funds before this age, you should take this as a huge warning sign that you are dealing with a fraudster.

Not receiving regular statements

Once you have transferred your pension, you should receive regular statements showing the value of your investment. If you do not receive regular statements, or if the statements show that your investment is not growing as promised, this could be a sign that you have fallen victim to a scam or bad advice.

Difficulty contacting the company

Legitimate financial advisors should be easy to contact. If you have difficulty contacting the company that you transferred your pension to, or if they are not responsive to your enquiries, then you should consider that you have fallen victim to a scam.

Red flag phrases

Fraudulent financial advisors tend to use similar vocab in order to sell you their service. Phrases such as ‘loophole’, ‘savings advance’ and ‘cashback’ should encourage you to approach tentatively, or not at all.

What should I do if I was the victim of a pension scam?

Luckily, it’s never too late to try and get your money back from a mis-sold pension scam. Our team of expert case handlers and financial claims specialists will take a look at the specifics of your case with a free, no obligation chat, and if we think you have been mis-sold or scammed, we work to get you your money back. Find out more about how to make a claim here.