How it works
The caller — sometimes a polished “adviser”, sometimes a call centre reading a script — offers to review your pension for free, promises to release cash before you reach the minimum pension age, or presents an overseas or unusual investment: hotel developments, storage units, forestry, green energy. The review always concludes that you should transfer.
The transfer goes to a scheme or SIPP the callers control or earn commission from. Charges are high and hidden, the underlying assets are illiquid or worthless, and the money is often gone before the first annual statement arrives. Victims are sometimes told they can access a lump sum now via a “loan”, which HMRC treats as an unauthorised payment.
Taking money out before the minimum pension age (currently 55, rising to 57) through a liberation scheme leaves you with a large tax charge on top of any losses. Fraudsters rarely mention this, and by the time the bill arrives the intermediaries have disappeared.
The law and your protections
Since January 2019 it has been illegal for firms to cold call you about your pension unless you have an existing relationship with them or have asked to be contacted; the Information Commissioner’s Office enforces the ban. Pension providers and trustees are also required to check transfers for warning signs and can pause or refuse a transfer to a suspicious scheme.
Free, impartial guidance is available from MoneyHelper, the government-backed service, and anyone giving regulated pension advice must be on the FCA Register. A genuine adviser will not object to you checking, and will not mind if you take a week to think about it.
What to check before transferring
Ask three questions: is the adviser on the FCA Register under the name and phone number they are using, is the scheme you would be moving to a registered pension scheme, and can you explain in a sentence what the money would be invested in. If any answer is unclear, do nothing; there is no pension deal that expires this week.
MoneyHelper offers free pension guidance and, for over-50s with defined contribution pensions, Pension Wise appointments. Your existing provider can also tell you whether a proposed transfer shows the warning signs it is required to check for, and that conversation costs nothing.
How to spot it
- An unsolicited call, text or email about your pension — the ban means legitimate firms don’t do this.
- Talk of unlocking your pension early, tax loopholes or guaranteed returns.
- Pressure to sign transfer paperwork quickly, sometimes with a courier sent to collect it.
- Unusual investments overseas, or a single investment that takes your whole pot.
- The adviser isn’t on the FCA Register or asks you to deal only through them.
What to do
- Hang up. Don’t engage, however polite or professional the caller sounds.
- Check any adviser or firm on the FCA Register and the Warning List, and get guidance from MoneyHelper before transferring anything.
- Tell your current pension provider if you are being pressured to transfer; it can flag or pause the request.
- Report cold calls to the ICO, suspected scams to Action Fraud or Police Scotland, and add the number to cislo.info.
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