Regulator steps up pension scam prevention efforts amid concerns over rising vulnerability

by | Aug 4, 2022

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Written by Tom Selby, head of retirement policy at AJ Bell

The last two years have already been incredibly difficult for millions of people, with Coronavirus and lockdowns taking a massive toll on people’s physical and mental wellbeing, including their financial health in some cases. On top of this, the cost-of-living is rising rapidly, with the energy price cap set to surge yet again later this year.

All of this means millions of Brits face being on or near the financial precipice in 2022. Depressingly, this is a perfect environment for scammers to thrive.

Unscrupulous fraudsters will attempt to take advantage of vulnerability through any means possible, from offering ‘early access’ to pensions to pushing dodgy investments promising sky-high, guaranteed returns.


Offers such as these might be particularly tempting to people experiencing inflation on the brink of double-digits.

However, the reality is that, unless you are in serious ill-health, accessing your pension early will lead to a huge tax penalty from HMRC, while being lured by the promise of sky-high investment returns from a scammer could see you lose everything.

Regulators are right to get on the front foot on this and the vast majority of the pensions industry stands ready to help educate customers about the risks.


It is particularly positive TPR is taking steps to improve intelligence sharing and testing new scam prevention solutions. It is vital firms share any concerns they have about schemes, firms or individuals with the relevant authorities, and vice versa, to ensure as many savers as possible are protected.”

Five top tips to help you avoid becoming a scam victim:

  1. If someone contacts you out of the blue to talk about your pension, hang up!

Most people at some point will have received a phone call from someone they don’t know claiming to offer an incredible investment opportunity for their savings or a ‘pension review’ service. If this happens, hang up immediately. Equally, don’t respond to text messages, emails or social media from someone you don’t know claiming to hold the key to retirement nirvana. In all likelihood this will be a scammer phishing for victims, so, whatever you do, don’t take the bait.

  1. Don’t deal with unregulated ‘advisers’

While telephone, text, email and social media remain the primary weapons of choice for the modern con artist, some continue to knock on doors; usually targeting older people they think are more likely to be vulnerable. Make sure you only deal with FCA-regulated advisers – this is particularly important as if you are sold an investment by an unregulated individual, you won’t have recourse to compensation

  1. Be wary of overseas or crypto investments promising sky-high returns

Scammers often promise double-digit returns through exotic investments in far-flung locations. Promoting cryptocurrency investment ‘opportunities’ has also become an increasingly popular route for fraudsters. If you’re told you can get 10%+ annual returns from a teak plantation in South American or a hotel room in Spain, tread carefully and do your due diligence. Often fraudsters will advertise investments in an asset that doesn’t exist or hasn’t yet been built, so don’t hand over your cash unless you’re 100% confident you’re being sold a genuine, bona fide investment.

  1. Watch out for schemes offering ‘guaranteed’ returns

Nothing, and I mean nothing, is guaranteed when it comes to investments. If a company you’ve never heard of says it can deliver GUARANTEED returns of any amount, don’t touch them with a barge pole.

  1. Don’t rush to make a decision

Don’t be forced into doing something you aren’t comfortable with and might regret by a pushy salesman or saleswoman desperate to boost their commission. Your pension might just be the most valuable asset you ever own, so invest it wisely. And if you are at all unsure, check the FCA’s ScamSmart website (ScamSmart – Avoid investment and pension scams | FCA) or speak to a regulated financial adviser before making any decision.

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