UK Pension Scams – Important Tips to Avoid Getting Scammed

Pension savings can provide financial security for many people during retirement and for the rest of their lives. For others, a pension can help to support their career choices and provide for those who are most important to them. 

Pensions are one of the most important and valuable assets that people have. Unfortunately, pensions, like any valuable asset, can become the target of fraudulent, inappropriate, or scam-related activities.

Our CEO and Independent Financial Advisor, Dominic James Murray, explains the top tips to spot a UK pension scam and how to avoid getting scammed in one of our YouTube videos below. Subscribe for more UK pension transfer tips and updates from the industry!

Strengthening Trustee’s Duties

The UK government is aware of the urgency of preventing people from becoming victims of UK pension scams, which can harm people’s future as well as their financial situation. The creation of new regulations is one of the government’s progressive actions.

The FCA strengthened the trustee role with the new regulations that went into effect in November 2021 in order to be more proactive in preventing the UK pension scam. The pension administrator is now legally bound to look for signs of a UK pension scam whenever a transfer is requested. 

This could be a pension transfer banning an arrangement that allows benefits to be paid out before the age of 55 (the earliest age at which pension benefits can generally be accessed) or a promise to pay out a tax-free lump sum greater than what HMRC allows after the age of 55.

Some companies offer members the opportunity to cash out their pension benefits early by transferring their pension savings to them. People are also being enticed with pension loans or cash incentives. They may also propose investing the transfer payment in to very high-risk investments or promising rates of return on investments that are highly unlikely to be realised. Such information can be extremely misleading and, in some cases, fraudulent and illegal. 

Another example is that, while many transfers to SIPPs are legal and require appropriate advice, the pension administrator would also warn you about a growing trend of SIPPs being used to lure pension scheme members into scams, since transferring to a Self-Invested Personal Pension (SIPP) requires extreme caution.

The pension administrator will advise you to consider whether the funds in which you intend to invest are regulated by the Financial Conduct Authority (FCA). The regulator, the ombudsman, or government compensation schemes do not protect unregulated investment funds.

How to Spot a UK Pension Scam?

Remember that UK pension scams can take many forms and frequently appear to be legitimate investment opportunities. Pension scammers, on the other hand, are astute and know all the ploys to entice you to hand over your savings. Aside from the increased regulation, you can also take proactive steps to avoid becoming a victim of a UK pension scam.

The following warning signs can help you spot a UK pension scam: 

  1. Have you been contacted unexpectedly? Ignore any contact, whether by phone, email, social media, text, letter, or even on your doorstep! Any unexpected phone calls, emails, or text messages should be avoided. Even if the person appears to know some basic information about you, don’t believe them. Cold calling in relation to pensions is now prohibited by the government and should be reported to the Information Commissioner’s Office (ICO).
  2. Offers or mentions of one-time investments, time-limited offers, upfront cash incentives, free pension reviews, legal loopholes, or government initiatives are all signs of a UK pension scam.
  3. Recommendations for making a single overseas investment that will yield 6-8 percent per year or more is a sign of a scam. Remember that investments can go up as well as down, and if something seems too good to be true, it most likely is!
  4. The scam is the promise to give you access to your pension before the age of 55. In fact, accessing your pension before reaching the age of 55 is only permitted in very limited circumstances, such as illness.
  5. There may be genuine-looking websites and marketing materials, but these can be cloned from legitimate businesses. They may also pretend to be from legitimate organisations. However, the right pension service will never contact you without first obtaining your permission. 
  6. Just because someone claims to be a regulated adviser and can show some official documentation does not mean that they are – and one of the hallmarks of recent scams has been individuals being given a false sense of security about the status of advisers.

How to Avoid UK Pension Scams?

Depending on what stage of a scam you believe you are in, you may need to take different steps. To assist you in this process, we have outlined two different scenarios below. If you believe you have been targeted and have recently agreed to transfer your pension, you should do the following as soon as possible:

  • STEP 1. Contact your pension provider immediately. They may be able to stop the transfer if it has not already gone through.
  • STEP 2. Contact Action Fraud on 0300 123 2040 and report the scam. Action Fraud will collect the information and issue you with a police crime reference number. Reporting your experience of action fraud may provide vital intelligence that prevents others from falling victim. 
  • STEP 3. You can report a regulated financial adviser or unauthorised adviser to the FCA by contacting their Consumer Helpline on 0800 111 6768 or by using this link

If your money was transferred a while ago and you haven’t been able to contact the organisation or find out where your money is, or if you haven’t received any paperwork in a while and if you believe you have been a victim of a scam, you should:

  • STEP 1: Report it to Action Fraud at 0300 123 2040. Action Fraud will collect the information and provide you with a police crime reference number. Reporting your experience with action fraud may provide vital information that prevents others from becoming victims.
  • STEP 2: Call The Pensions Advisory Service (TPAS) and request a Pension Loss Appointment if you’ve transferred your pension money and are concerned that you can’t find it or that you’ve been scammed. 

Cameron James, Expat Financial Planning – Your Trustworthy Pension Transfer Specialist

Cameron James Expat Financial Planning is the preferred independent financial adviser for Final Salary pension and SIPP transfers. With over ten years’ experience in pension transfers, Cameron James is now servicing clients in 26 countries. 

We have the qualifications and technical knowledge required to help you transfer to an international SIPP as an expat as well as US resident. Our mission is to bring regulated and transparent advice to our clients. As such, our clients know how much their advice will cost in advance, with no hidden fees.

Cameron James Expat Financial Planning has a sophisticated cash flow management system in place. Our senior management team has a decade of experience in serving expats and is committed to serving the requirements of expats for decades to come.

Transferring a DB or DC pension into a SIPP plan for expats is not a simple decision. Before deciding, many details and procedures must be thoroughly understood. Without this knowledge, the benefit could turn into a potential loss.

It is essential to seek competent advice from a qualified financial adviser to verify that your profile matches the options available and to ensure that your choice meets both the UK and US regulations. Meet one of our dedicated advisers to get a full understanding of your UK pension.

Related Articles

The image features a confident-looking man in a professional suit with his arms crossed. He is standing against a dark blue background. Bold yellow text at the top reads "BRITE ADVISORS," and below in a smaller font is "SOUTH AFRICA TRANSFER." The design suggests a promotional or informational material possibly related to financial services offered by Brite Advisors in South Africa.

Book Your Free Consultation

Option 1. Book a day and time in our Online Calendar.

Option 2. Leave your details and we'll be in touch within 12hrs.

    Reach Us