Pension Scams: Be Scam Safe

With recent Action Fraud reports announcing that over £17.5m was lost to pension fraud in 2024, savers are being encouraged to be extra-vigilant when it comes to spotting scammers.

During periods of financial strain, such as the cost of living crisis, many people may find themselves looking for lucrative financial opportunities. Unfortunately this can result in people being tempted by risky deals, and if lured by a scam, can result in the loss of life savings including entire pension pots.

Taking a few minutes to familiarise yourself with the red flags of a pension scam could help protect you and your finances from ruin, these include:

Cold calls, text messages or contact out of the blue with promises of quick cash, legal loopholes and pension loans
Unusual high-risk investments like forestry, property or renewable energy bonds
Claims of accessing your pension before age 55
Promises of high or guaranteed returns
Free pension reviews
Complicated company structures, so it is not clear who is responsible for your money
Transfers of your money overseas
Several groups all taking a fee, meaning a large proportion of your pension is deducted

Steps to Avoid Becoming a Victim

Many of us may believe that we would be able to spot a scammer, but fraudsters can target savers anywhere, from email to text, and even on their own doorsteps. They may even make contact through social media, using friends or family to reach out to people with financial opportunities that sound too good to be true.

One of the best ways to avoid falling victim to a pension scam, is to arm yourself with knowledge. By taking note of the below steps, you could avoid becoming the victim of a pension scammer:

Never give your financial or personal information out to a cold caller
Be wary of unsolicited financial offers in emails, texts, mail or via social media
Protect online accounts by using strong and secure passwords and turn on two-step verification
If you receive a proposal, speak to an advisor who is not associated with the company you have been approached by. If you are seeking a Financial Adviser, they should be authorised by the Financial Conduct Authority (FCA)
If you receive a proposal, ask for a statement showing how your pension will be paid at retirement, and question who will look after your money until then

Many scammers may provide professional marketing materials and use the tactic of pressurising people into making quick decisions, before they have time to think about whether the opportunity is genuine. No legitimate organisation will pressurise you into making an urgent decision about your pension.

All pension savers should speak to an independent FCA-authorised adviser before making any transfers with their pension. The FCA is the professional body which regulates firms and individuals that provide financial advice meaning it can provide details of authorised advisors.

The NESPF will never call members to ask for their bank details. If we have any questions about bank details we would email or write to you. Similarly we do not accept bank detail changes over the phone. If someone calls you claiming to be from the Pension Fund, ask for their name, hang up and then call our helpline on 01224 045 045. We will be able to confirm any genuine enquiries.

If you suspect suspicious activity we ask you to inform the police immediately by telephoning 999. If you have been contacted by a suspicious person about the LGPS, you are also encouraged to inform the police as soon as possible. Non-emergency crimes can be reported to Police Scotland by calling 101 or you can fill in a form for general enquiries.

For more information on pension scams click here. To report a scam visit the Pensions Regulator website or ScamSmart website.