Pension Scams: How to Spot and Avoid Them

Pension scams are among the most financially devastating forms of fraud. Unlike some types of fraud where losses are recovered from insurance or bank indemnities, pension fraud victims often lose their entire retirement savings with no recourse. The losses are typically permanent.

HMRC and The Pensions Regulator estimate that hundreds of millions of pounds are lost to pension scams annually in the UK. Victims span all ages and backgrounds, but retired and near-retirement individuals — and UK expats approached about QROPS and overseas transfers — are particularly targeted.

Understanding how scams work, what the warning signs look like, and how to verify legitimate advisers is essential protection.

Types of Pension Scam

Pension Liberation Fraud

Pension liberation fraud involves persuading pension holders — often those facing financial hardship — to transfer their pension to a scheme that claims to offer access to pension funds before age 55. The pitch is often combined with a "loan" that returns part of the pension immediately in exchange for signing over the pot.

The reality: there is no legitimate mechanism to access most pension funds before age 55 (with very limited exceptions for serious ill-health). Any withdrawal from a pension before the minimum access age is treated by HMRC as an "unauthorised payment" and is subject to a charge of up to 55% of the amount taken. The victim typically receives a small initial payment, then faces a massive HMRC tax bill, and discovers the remaining pension has been invested in worthless or non-existent assets.

High-Return Investment Scams

Pension holders are persuaded to transfer their pot into an overseas QROPS or self-invested pension vehicle that claims to offer high returns from unusual investments — often described as "unique", "exclusive", or "exotic". Common investment vehicles used in these scams include:

• Overseas property in high-risk or illiquid markets
• Carbon credits
• Storage pods
• Timber plantations
• Fractional hotel or resort units
• Crypto assets (in more recent scams)

These investments are typically unregulated, illiquid, extremely difficult to value, and in many cases entirely fraudulent. The pension is moved out of a properly regulated UK pension, the investments perform poorly or collapse entirely, and the victim has no FSCS protection or regulated recourse.

Unregulated Adviser Fraud

Some scammers pose as regulated financial advisers. They may have a professional-looking website, glossy brochures, and business cards. They claim to be registered with the FCA. In reality, they are not — or they are "clone firms" operating under a name very similar to a legitimate FCA-registered firm.

Always verify an adviser's identity independently using the FCA Register — not just a certificate or brochure they show you.

Cold-Contact Scams

Scammers contact potential victims unsolicited — by phone, text, email, or social media — offering pension reviews, QROPS transfers, or investment opportunities. Since the FCA's ban on cold-calling in relation to pensions came into force in January 2019, any unsolicited contact about your pension from a firm you have not previously dealt with should be treated as a significant red flag.

Warning Signs of a Pension Scam

The FCA and The Pensions Regulator's ScamSmart campaign identifies the following key warning signs. Be particularly alert if you encounter any of these:

Unsolicited contact: A cold call, text, email, or WhatsApp message about your pension from someone you did not initiate contact with.

Free pension review: Offered unsolicited, or with pressure to act quickly.

Guaranteed high returns: Claims of guaranteed returns of 10%, 20%, or higher, or promises of "unique" investment opportunities not available to the general public.

Pressure to act quickly: "Limited time offer", "the investment opportunity closes soon", or pressure to transfer before you have time to take independent advice.

Unusual investment types: Overseas property, carbon credits, storage pods, or other non-mainstream investments described in vague or glossy terms.

Claims of early pension access: Any claim that your pension can be accessed before age 55 (other than in the most serious health circumstances).

Overseas transfer push: Pressure to transfer to an overseas scheme you know nothing about, particularly combined with other warning signs.

Asking you to sign a blank form or to give them your transfer authority: No legitimate adviser asks you to sign blank documents.

Fee taken from the pension: Legitimate advisers charge fees in a transparent, agreed way — not by taking a slice of the pension fund without proper documentation.

How to Verify a Legitimate Adviser

Before engaging with any financial adviser or pension transfer, verify them independently:

Step 1: Check the FCA Financial Services Register (register.fca.org.uk)

Search for the firm by name. Verify:

• The firm appears on the register
• The registration is current (not expired or cancelled)
• The firm has the correct permissions (specifically "advising on pension transfers and pension opt-outs" for DB transfers, and relevant investment permissions for QROPS)
• If an individual adviser is referenced, check they appear as an approved person on the firm's register entry

Step 2: Check for clone firms

Fraudsters sometimes create "clone" firms — companies with names very similar to legitimate regulated firms. If you have been contacted, compare the contact details you have with the details on the FCA Register. Any difference in phone number, address, or website may indicate a clone.

Step 3: Use the ScamSmart warning list

The ScamSmart website (fca.org.uk/scamsmart) includes a warning list of firms known to be operating scams or unauthorised. Check the firm against this list.

Step 4: Check the ROPS list for QROPS schemes

If a QROPS transfer is proposed, verify the receiving scheme appears on HMRC's current Recognised Overseas Pension Schemes (ROPS) list on gov.uk. Inclusion on the list does not guarantee legitimacy — but a scheme that is not on the list is definitely not a qualifying QROPS.

Step 5: Take independent regulated advice

For any DB pension transfer above £30,000, regulated advice from a Pension Transfer Specialist is a legal requirement. For other significant pension decisions, regulated advice is strongly recommended even where not legally required.

Expats: Specific Vulnerabilities

UK expats are specifically targeted by pension scammers because:

• They are more likely to consider overseas transfers (QROPS)
• They may be less connected to UK regulatory news and warnings
• They may feel isolated from UK consumer protection channels
• They may have lost contact with their original adviser or pension providers

The most common scam approach targeting expats involves promising a QROPS transfer to a low-tax jurisdiction with "superior" investment returns. The "adviser" may claim to be based in a reputable jurisdiction (such as the UAE, Malta, or Singapore) but hold no valid regulatory authorisation.

In the UAE, for example, legitimate financial advisers should be regulated by either the Securities and Commodities Authority (SCA) or the Dubai Financial Services Authority (DFSA) within the DIFC. In Singapore, the Monetary Authority of Singapore (MAS) regulates financial advice. An "adviser" who cannot demonstrate local regulatory registration alongside FCA authorisation for UK pension advice should be treated with great suspicion.

What to Do If You Have Been Targeted or Are a Victim

If you have been approached but have not transferred:

• Do not sign anything or provide any transfer authorisation
• Do not return calls or respond to follow-up contacts
• Report the approach to the FCA (consumer helpline) and Action Fraud
• Warn your pension provider to be alert for transfer requests

If you have already transferred your pension:

• Contact Action Fraud (actionfraud.police.uk) immediately — early reporting gives the best chance of recovery
• Contact the FCA
• Seek immediate legal advice — depending on the circumstances, civil recovery or regulatory action may be possible
• Report to The Pensions Regulator

Emotional impact: The psychological and financial devastation of pension fraud is well documented. Victims often experience significant distress. Citizens Advice and victim support charities can provide additional guidance.

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This guide is for general information only. If you are in any doubt about the legitimacy of a firm, adviser, or pension product, seek regulated advice from a verified, FCA-authorised firm before taking any action. The FCA, HMRC, and Action Fraud contact details are available on their respective websites.

How Global Investments Can Help

Global Investments is an independent international advisory firm with over 32 years of experience in international pension and investment planning, working with FCA-authorised Pension Transfer Specialists where UK-regulated advice is required. We help clients distinguish legitimate pension options from fraudulent or inappropriate schemes, and we work exclusively through regulated, verifiable channels.

If you have been approached with an offer you are unsure about, or want a second opinion on a pension transfer recommendation, please contact us — we are here to help.

Contact us to speak with a regulated pension specialist.