11 September 2018 | Comment | Article by Suzanne Browne

Protecting your pension and savings against scammers

Protecting yourself against scammers; don’t let a lifetime of savings be lost in moments.

Pension and investment scams are on the increase. Everyday fraudsters are using sophisticated ways to part savers from their money, and the Internet and advances in digital communications mean these kinds of scams are getting more common and harder to identify.

Tactics commonly used to defraud

New research[1] found nearly one in ten of over-55s say they have been approached about their pension funds by people they now believe to be scammers since the rules came into effect from April 2015.

Offers to unlock or transfer funds are tactics commonly used to defraud people of their retirement savings.

One in three over-55s say the risk of being defrauded of their savings is a major concern following pension freedoms. However, nearly half of those approached say they did not report their concerns because they did not know how to or were unaware of who they could report the scammers to.

Safeguarding hard-earned retirement savings

Pension freedoms, though enormously popular with consumers, have created a potentially lucrative opportunity for fraudsters, and people need to be vigilant to safeguard their hard-earned retirement savings.

If it sounds too good to be true, then it usually is, and people should be sceptical of investments that are offering unusually high rates of return or which invest in unorthodox products which may be difficult to understand. If in any doubt, seeking professional financial advice from a regulated adviser will help ensure you don’t get caught out.

Top three financial scams to look out for in the UK


  • Boiler-room schemes


These scams promise investors impressive returns, but they deliver nothing apart from a great big loss. More than 5,000 investors lost a combined £1.73 billion through boiler-room schemes reported to the Action Fraud crime-prevention centre in 2014. Victims will receive a telephone call out of the blue and be offered an investment opportunity with sky-high returns of as much as 40%. You will most likely be told that you must act fast and asked to transfer your money straight away. It’s common for victims to part with tens of thousands of pounds. Boiler rooms are not authorised by the Financial Conduct Authority (FCA). This means that if you hand over your cash, it might be the last you will see of it.

Take action

Check the FCA status of any firm you intend to deal with for investments. Call 0800 1116768 or go to www.fca.org.uk/register.


  • Pension liberation


Scammers are bombarding people aged 55 and over with bogus investment opportunities to try to get hold of their pension savings. One of the most common scams since the pension freedoms were announced involves alleged investment opportunities abroad. Low interest rates are tempting some people to take extra risks, so they are vulnerable to such fake investments.

Take action

If you’re offered a ‘must-have’ investment or a free pension ‘review’ out of the blue, be wary. Also, be concerned if you’re warned that the deal is limited and you must act now. Choosing the right retirement income product is a big decision and shouldn’t be done quickly or under pressure. Consult a registered professional financial adviser. If you think that you may have been made a fraudulent offer, contact Action Fraud on 0300 1232040 or visit the FCA’s Scam Smart site to see if the investment you’ve been offered is on their warning list: http://scamsmart.fca.org.uk/warninglist.


  • Homebuying fraud


This con intercepts cash transferred as a home deposit to a solicitor in the lead up to exchange and completion. It’s all done via the Internet where a computer hacker monitors emails sent between a solicitor and client. When a bank transfer is about to be made, the fraudster emails the homebuyer pretending to be the solicitor, telling them the details of the law firm’s bank account have changed. The unsuspecting homebuyer sends their cash to the new account, where it is withdrawn by the fraudsters.

Take action

If you’re buying a property, watch for any emails about payments, such as a change in bank details at the last minute. Many victims are told that the account is being ‘audited’, and so another one must be used. Ring your solicitor if you’re in any doubt.

Scammers can approach you by post, email or telephone or at a seminar or exhibition. For professional advice you can trust contact us on 029 2066 0565.

Source data:

[1] Consumer Intelligence conducted an independent online survey for Prudential between 23 and 25 February 2018 among 1,000 UK adults aged 55+ including those who are working and retired

[2] www.actionfraud.police.uk/fraud-azpension-liberation-scam

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