How to avoid becoming the victim of a pension scam

Following the publication of an article by the BBC over the weekend – ‘Degree-educated savers ‘at risk of fraud’’ (, we thought we would highlight some key tips on how to avoid becoming the victim of a pension scam.

The BBC article referenced above, details the findings of a survey conducted by regulators, which identified that degree-educated savers are at greater risk of losing their pensions to fraudsters than those individuals without qualifications. Whilst this may be the result of fraudsters targeting people with potentially larger pension funds, 14% of respondents with a degree told regulators that they would accept the offer of a ‘free pension review’ from a company they did not know. When it comes pension fraud, no-one is immune from falling victim.

Sadly, I have witnessed first-hand how pension scams have devastated both people’s lives and their retirement plans. Over the last couple of years, I have been asked by a few people to help them try and rebuild their futures, after they had previously fallen victim to pension scammers. Between them these individuals had suffered combined losses of circa. £120,000 (this figure only includes original investment capital). The survey conducted by regulators found that on average pension scam lost £82,000 in 2018.

One thing that quickly becomes apparent from talking with victims is that they feel very angry, amongst a host of other emotions, at having their life savings taken from them.

In the instances that I have come across, the investors concerned had been recommended wholly unsuitable, high-risk and illiquid investments, affording them no diversification whatsoever. Such investments predominantly related to obscure overseas property development and infrastructure projects, which subsequently collapsed, leaving nothing left of their original capital. Furthermore, as the advice they had been given was unregulated, they had no recourse to either the Financial Ombudsman Service or the Financial Services Compensation Scheme.

As you can imagine the individuals who had persuaded these people to invest had long since gone, having taken with them significant fees and leaving their investors in a desperate situation.

It is important to note there are many excellent ‘regulated’ financial advisers in the marketplace who provide real value to their clients on a daily basis. However, as far as consumers of financial services are concerned there are some important steps that they need to take to ensure they are dealing with a suitably qualified and regulated professional.

The guidance detailed below has been taken directly from the Financial Conduct Authority (FCA) website (

‘Scammers can be articulate and financially knowledgeable, with credible websites, testimonials and materials that are hard to distinguish from the real thing. Scammers design attractive offers to persuade you to transfer your pension pot to them or to release funds from it. It is then invested in unusual and high-risk investments like overseas property, renewable energy bonds, forestry, storage units, or simply stolen outright.’ (Don’t let a scammer enjoy your retirement – Customer Leaflet:

The FCA guidance highlights some of the tactics used by pension scammers. Whilst not an exhaustive list, such tactics include:

·       Contacting you out of the blue

·       Making promises of high or guaranteed returns

·       Offering a ‘free pension review’

·       Giving you the impression that you can access your pension before age 55

·       Putting pressure on you to act quickly

As from 9th January 2019, it has been made illegal for companies to make unsolicited calls about your pension ( The ban prohibits cold calling in relation to pensions, except where the caller is authorised by the FCA, or is the trustee or manager of an occupational or personal pension scheme, and the recipient of the call consents to calls, or has an existing relationship with the caller

The FCA recommends 4 simple steps to protect yourself from pension scams:

1.     Reject unexpected offers/calls and be wary of free pension review offers

2.     Check who you are dealing with – which can be done via the Financial Services Register (

3.     Don’t be rushed or pressured into making a decision and take your time to make all the checks you need

4.     Get impartial information and advice. The Pensions Advisory Service ( provides free independent and impartial information and guidance and Pension Wise ( offers pre-booked appointments to talk through your retirement options if you are over 50.

Whilst both The Pensions Advisory Service and Pension Wise can provide free independent and impartial ‘information’ and ‘guidance’, they are unable to provide you with ‘advice’. In other words, they can tell you what you ‘can’ do (i.e. the generic options available) and not what you ‘should’ do, given your circumstances.

If you want to make the best decision for your own personal circumstances it is important that you seriously consider using the services of a regulated financial adviser.

There are some good directories available whereby you can be sure you are dealing with a suitably qualified and regulated financial adviser. These directories include Unbiased (, Vouchedfor ( and The Personal Finance Society ( You can be confident that the advisers you find on these directories are regulated by the Financial Conduct Authority and have been verified against the Financial Services Register.

To avoid any potential conflicts with the information contained within this article, it is important to note that you will find a number of firms listed on ‘Unbiased’ offer a free pension, investment or mortgage health check. This is quite normal for this directory but simply means the adviser will offer you a free initial consultation. If you proceed with their recommendations, they will levy advice charges for their services so be sure what these are at the start of the process.

You can find further guidance on The Pensions Regulator website on how to avoid pension scams (   

This article has been written for educational and awareness purposes only and does not constitute financial advice. Paul Sweeny is Managing Director of Sweeny Wealth Management Ltd. He is a Chartered Financial Planner, a Fellow of the Personal Finance Society and holds a Masters degree of Financial Planning and Business Management.

Sweeny Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority under firm reference number 821005. Investments can fall as well as rise and you may get back less than you invested.

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