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Pension scams

As of April 2015, new pension rules mean that if you are a saver over the age of 55 with a personal or company pension, you will have greater access to your pension pot and can release more or all of your savings to do as you wish. This change is likely to increase fraudster’s efforts to deceive you into cashing in your pension early, charging advance fees, offering cash back or putting your money into bogus investment schemes.

If you are considering moving your pension funds into an investment always seek impartial regulated advice. All pension advisors, brokers or financial organisations should be authorised and regulated by the Financial Conduct Authority (FCA). You can check for this by visiting www.fca.org.uk/register or by calling their consumer helpline on: 0800 111 6768.


What types of pension scam are there?

Pension scams can take many forms. Fraudsters have already been targeting customers below the age of 55, informing them that they can release pension funds early due to so called ‘legal loopholes’. They will play on your desire to keep your savings safe yet try to entice you into high-risk investments that are ‘guaranteed’ to grow in value and make you lavish financial returns. 

They may pose as pushy sales people or pension advisors and tend to offer unusual investments such as; overseas property, forestry, storage units, care homes, biofuels, rare metals and even cemetery plots. They may offer a ‘free pension review’ or ‘retirement planning advice’ and tempt you with an ‘advance loan’, ‘savings advance’ or ‘cashback’ to take advantage of a deal that involves transferring all or part of your pension funds.

Returns on investments aren’t ‘guaranteed’ and ultimately, you may be hit with a huge tax bill along with losing all or part of your retirement savings if the investment turns out to be worthless. As the fraudsters and bogus companies offering these investments are not authorised or regulated by the FCA, this means that you won’t be protected by the Financial Services Compensation Scheme, if things go wrong.

What are the warning signs to look out for?

  • Out of the blue contact - Be on your guard if you receive an unsolicited approach whether it be by; telephone, email, text message or on the doorstep. 
  • Offer of afree pension review’ or ‘retirement planning advice’ - Fraudster’s try to grab your attention by offering a free pension review, retirement advice or claiming to be acting on a Government initiative.
  • Phrases such as; ‘Government endorsement’, ‘legal loopholes’ or ‘cash bonus’- If you are approached unexpectedly by pushy advisers or ‘introducers’ and offered a free pension review or hear any of the terms mentioned, it’s likely to be a scam.
  • Guaranteed Returns - Be alert to unsolicited approaches about investing the money released from your pension pot into unique investments that will soar in value and make cast iron returns.
  • Incentive offers – You may be enticed with an offer of a ‘loan’, ‘saving advance’ or ‘cashback’ to take advantage of a deal. Don’t be duped into giving away your pension savings in return for a short term cash fix. 
  • Access to your pension pot before the age of 55 – You are only able to take your pension before the age of 55 in very rare cases e.g. illness. Accessing your pension fund early may not only lead to lost funds due to a bogus investment but huge tax implications too.
  • Pushed to act fast – Fraudsters tend to be described by their victims as ‘pushy’ and ‘persistent’.  If you are considering transferring your pension fund into a new scheme and you are being encouraged to speed up the transfer process by signing any paperwork or moving funds quickly, be very wary. 
  • No mention of risks or implications involved – You should be informed about potential risks or tax implications involved with the investment. If these aren’t mentioned or explanations are vague be cautious. 

I have lost money to a Pension scam or a fraudulent investment. What should I do?

If you bank with us and think you may have fallen for a pension scam recently or suspect that you are being offered a fraudulent investment, contact us immediately. 

If you don’t bank with us and have lost money to a pension scam or bogus investment report it to Action Fraud, the UK’s national fraud reporting centre at www.actionfraud.police.uk or by calling 0300 123 20 40.

Where can I find out more about Pension scams?

You can find out more about pension scams on www.thepensionsregulator.gov.uk or by visiting www.pensionwise.gov.uk  

Where can I find out more about Investment fraud?

More information about investment fraud is available here.