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Can you spot a pension fraud?

Updated 01 December 2022

6min read

Nick Green
Financial Journalist

How can you tell at a glance if it’s a scam or genuine financial advice? Here’s a side-by-side comparison so you don’t end up losing your pension to a con-artist.

Last April pension freedom was introduced, giving people unprecedented access to their pension pots from the age of 55. This has been almost universally welcomed among the UK public – and, unfortunately, among fraudsters too. As early as May 2015, Action Fraud (part of the City of London Police) reported that cases of pension fraud had tripled in the wake of pension freedom. Furthermore, since April 2015 nearly 11 million people have received unsolicited contact about their pension, according to research by Citizens Advice and the Office for National Statistics.

The most common type of pension fraud used to be ‘pension liberation’ – offering people access to their pensions before the age of 55. This still goes on, but now criminals and opportunists are coming up with more and more ways to try and part unsuspecting pensioners from their pension pots. Citizens Advice also found that most people aren’t checking that these unsolicited offers are genuine, with the majority simply consulting family members or looking at the company’s own website – before handing over their life savings.

The good news is, there’s no need to panic. Real, trustworthy advice is out there, and if you know what to look for then it’s easy to tell who is a genuine adviser and who is not. Here’s a straightforward comparison table so you never get caught out.

Pension fraudster

They contact you

You might receive a phone call, email or text message in the first instance. Some may claim to be part of a government service, or strongly imply this. In this capacity they may appear to offer you free advice on your pension.

They may offer you a free pension check

Offering a free pension ‘check’ or ‘review’ is a common opening move in a pension scam, as genuine advisers do offer a similar-sounding service. However, if you did not contact the adviser first, just say no. It will not give you any useful information, but will give the fraudster plenty.

They may appear to be free

You may be offered ‘advice’ that appears to be free at first, or told that your ‘adviser’ is paid through commission. Advice is no longer paid for in this way. If the fee is not transparent, break off communication.

They offer investments without full knowledge of your circumstances

Someone may offer you an investment for growing your pension savings, and it may sound legitimate. But if they don’t know anything else about your financial circumstances (or your risk tolerance), they cannot know that this product is suitable for you. Therefore they must be selling it for their own benefit – not yours.

They may offer you extraordinary returns

Does the interest or growth sound too good to be true? Then it probably is. If deals like that existed then cold-callers would not have to sell them.

They will probably try to rush you

Probably this extraordinary rate of return is only available for a limited time – perhaps just this week. Or you may be offered one of the last remaining deals. Really convincing fraudsters may fuel this sense of urgency by rushing round a courier with papers for you to sign. This is doubly cunning, because of course the courier can’t answer any of your questions.

They use other forms of pressure

Some cold-callers who claim to be government-related may even suggest negative consequences if you don’t take their advice – such as restrictions on your state pension. Any such threat is nonsense, and a dead giveaway.

They will play down any risks, but won’t assess your risk profile

A fraudster may offer you reassurances that an investment is low-risk. But they are unlikely to assess your own attitude to risk in much detail (though they might ask a few token questions).

The scheme they are offering is high-risk

Are they suggesting investing a very large amount in one particular asset class, such as fine wines or art? Any arrangement that places a large proportion of your wealth in a narrow range of investments is by definition high risk. Do not believe any reassurances to the contrary.

They are not registered with the FCA

Ask anyone who offers you financial services of any kind to tell you their FCA reference number, then look them up on https://register.fca.org.uk. If you do find them listed, click through to find out more about the firm. You need to find out how much protection the FCA would offer you if you were to use this firm.

They offer to let you access your pension before the age of 55

After cold-calling, this is perhaps the biggest giveaway. Accessing your pension before you are 55 is illegal, so they are breaking the law and asking you to do the same. You would also end up handing the fraudster a large chunk of your pension. Don’t do it.


Genuine financial adviser

You contact them

A genuine financial adviser will not contact you first. Nor will any government service offering free pension guidance – you have to approach them. To ensure your adviser is unbiased, use unbiased.co.uk.

Some provide a free pension check

A genuine pension check will look not just at your pension but at your overall financial situation. It isn’t advice and won’t make any recommendations, or involve any selling of products. It’s most useful in deciding whether or not you could benefit from advice. Look for the badges on Unbiased, or book yours here.

They charge a transparent fee

Your adviser should tell you exactly how much their services will cost, and what each part of the bill covers.

They will make a detailed investigation of all your finances before offering advice

Genuine financial advice is a comprehensive process. No investment is the best option for every individual, so all recommendations made to you must be based on a thorough understanding of your circumstances, needs and goals. Most financial advisers work in the order of person, planning, product: understand the person, create a financial plan, and only then find the most suitable products.

They will be realistic

Financial advisers don’t offer magical get-rich-quick schemes or tricks for beating the market. Rather, they enable you to achieve the best practical results by aligning your financial plan with your long-term goals.

They will go at your own pace

Your financial adviser works for you. He or she won’t ever sell you anything or push a product on you that you’re unsure about. Even if they’re convinced it’s best for you, you can still just say no.

You should feel comfortable at all times

A genuine financial adviser has no incentives other than to work in your best interests. If you ever suspect this is not the case, double-check their credentials.

They will assess your attitude to risk

Your financial adviser will look in detail at how comfortable you are with risk and how resilient your finances are in general. You may be asked to fill in a questionnaire about it. Any recommendations they make will then be based on your risk profile.

Your financial plan follows your risk profile

Having found out how comfortable you are with risk, your adviser will suggest suitable investment products. However, even if you have a very relaxed attitude to risk, your adviser will still recommend keeping some of your wealth in low-risk assets. No legitimate financial adviser will ever ask you to ‘take a punt’ with a sum of money you can’t afford to lose.

They are FCA registered

Being registered with the Financial Conduct Authority (FCA) means you have certain protections if you use this firm. If you also find the adviser listed on unbiased.co.uk, then you are further assured that the adviser is not affiliated to any product providers, so can give unbiased advice.

They will advise you on how to access your pension from age 55 onwards

A financial adviser will tell you all you need to know about drawing an income from your pension, based on your needs, goals and personal circumstances. It will not involve any convoluted schemes.


For a simple overview of how to access your pension, download our free guide.
Find a financial adviser you can trust at unbiased.co.uk.If you think you have been the victim or the target of a scam, you can call the FCA on 0800 111 6768. If you may have already lost money to a fraudster, contact Action Fraud on 0300 123 2040 or visit www.actionfraud.police.uk.

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About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.