Don’t Be A Victim Of Pension Fraud

Today (14th August) sees the launch of a joint campaign by the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) to make people aware of pension fraud and how to protect against it. The FCA estimates victims of pension fraud in 2017 lost a total of £23M making the average loss £91,000 per person.

Assuming you miss the campaign, here are a few tips to protect yourself: –

  • If someone phones, emails or texts you out of the blue offering a “free pension review”, ignore it. Put the phone down or delete the message. There is no such thing as a “free pension review”. If someone stopped you in the street and asked to look in your wallet under the guise of a “free review”, you’d walk by very quickly – why let someone offering you a “free pension review” do something very similar?
  • Don’t fall for the promise of returns that are either “guaranteed” or significantly above the market norm. The only way to achieve high returns is to take high risks.
  • Check the status of anyone you are speaking to about your pension on the FCA Register which can be found at FCA Register
  • Never transfer money overseas including to UK overseas territories
  • Ignore any schemes that offer the chance to access money outside the normal tax rules (that is, 25% of your fund tax free and the rest taxable as income). If you somehow avoid tax on your pension and HMRC find out, you risk fines and penalties that will dwarf the tax you have avoided
  • Avoid highly specialised investments such as hotel rooms in Cape Verde

Two of the main triggers for the rise in pension fraud have been the introduction of Automatic Enrolment and the pension freedoms of 2015. The former has markedly increased the number of people with pensions while the latter has, by increasing the options available at retirement, also served to confuse many people as to what their genuine options are.

Significantly, Government has been responsible for both of these, yet it is Government that continue to prevaricate over a ban on pension cold calling. Two years after it was promised, there is still no date for its introduction. There really is no excuse for this – ask the people who have lost the £91,000 – and it should be introduced immediately.

A more nuanced question is what role do employers play in all this? Many employers still do the bare essentials to comply with Automatic Enrolment legislation. They do not engage with their employees (understandably given the problems around what does and does not constitute “advice”) nor do they engage with authorised advisers. This leaves a very large pool of people who suddenly have pension money but have no access to any reliable source of advice about it.

According to the CBI/Aegon ‘Engaging with Saving Report’ 2018 only 60% of firms engage with an external adviser and just 49% run in-house group seminars to educate staff about pensions.

With Automatic Enrolment contributions expected to reach £133bn in 2019/20, it is hard to see pension fraud numbers not rising unless Government and employers begin taking action now.



For details on how you can help educate staff not only to avoid pension fraud but also get the best outcome for their pension money, call us now on 0333 241 3350 or email

Peter Murphy DipPFS

This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case. It does not constitute legal or tax advice and must not be treated as such. All statements concerning taxation are based on our understanding of the current law and HMRC practice, and proposed changes, as at the date of publication. Levels and bases of, and reliefs from, taxation are subject to change.  The provision of advice in relation to taxation is not a regulated activity. The value of investments can fall as well as rise and you may not get back the full value of your investment