UK Pension Scams: How to Identify Them and Protect Your Retirement Savings

The loss of retirement savings to fraud is one of the most devastating financial events that can happen to an individual. Unlike investment losses, which are at least the result of a legitimate market process, pension scam losses are criminal theft — and recovery rates are very low. Action Fraud and the FCA report tens of millions of pounds lost to pension scams each year, with average reported losses per victim running into the tens of thousands (in some years exceeding £50,000) — though the true total is widely accepted to be higher, as many scams go unreported or undetected for years. For expats, the risk is higher: distance from the UK professional networks that would normally provide a reality check makes it easier for fraudsters to operate without scrutiny.

In this guide we describe the most common types of pension scam, the warning signs every pension holder should know, how scammers specifically target the expat community, and what to do if you encounter or have fallen victim to suspected fraud.

The Scale of the Problem

The figures are significant. The FCA and The Pensions Regulator jointly run the ScamSmart campaign, which estimates that pension scams are persistently underreported — many victims are too embarrassed to report their experience, or only discover the loss years later when they attempt to access their pension. The actual scale of losses is likely considerably higher than recorded figures suggest.

Pension scams are not just committed by obvious fraudsters. Many operate through sophisticated corporate structures, professional-looking websites, glossy marketing materials and seemingly persuasive investment propositions. Some use clone firms — organisations that copy the details of genuine, FCA-authorised firms and use them to deceive victims into believing they are dealing with a legitimate adviser. The professionalism of the presentation is never a reliable guide to the legitimacy of what is being proposed.

Common Types of Pension Scam

1. The "Free Pension Review"

One of the most common entry points for pension fraud is an unsolicited offer of a "free pension review". This may come via a cold call, a text message, an email, or an approach on social media. The caller typically presents themselves as a financial adviser offering an independent review of your pension — identifying whether you could be getting better returns, paying lower charges, or accessing benefits you are not currently receiving.

In most cases, the purpose of the "review" is to persuade the pension holder to transfer their fund to a new pension arrangement — one that generates a commission for the introducer and typically involves high-risk, illiquid or outright fraudulent investments. Cold calling about pensions is banned in the UK. Any unsolicited contact offering a pension review should be treated as a red flag.

2. Pension Liberation / Pension Unlocking

Pension liberation — also described as pension unlocking, pension release, or "freeing up your pension" — involves schemes that claim to allow pension holders to access their pension funds before the minimum pension access age. The minimum access age is currently 55 and will rise to 57 in 2028. Accessing pension funds before this age is only permitted in very limited circumstances involving serious ill health.

Any arrangement that claims to allow early pension access in other circumstances is almost certainly illegal. HMRC treats such withdrawals as "unauthorised payments" and charges an unauthorised payments charge of 40% on the amount withdrawn — plus, where the unauthorised payments exceed 25% of the fund, a further 15% surcharge (taking the combined charge to 55%) — in addition to any income tax. On top of HMRC's charge, the fraud itself may result in the pension funds being lost entirely. Victims of pension liberation fraud lose both to the fraudsters and to HMRC.

3. Guaranteed High Returns

Investment scams wrapped inside pension structures are particularly dangerous because they are difficult to detect and can take years to unravel. The typical pitch is that the pension fund will be invested in a high-return asset — property development overseas, carbon credits, storage pods, rare earth metals, green energy projects, wine, diamonds — often described as uncorrelated with stock markets and offering guaranteed returns of 8%, 10%, 12% or more per year.

These investments are typically placed within a SIPP, exploiting the flexibility that SIPPs allow in investment choice. The assets are usually illiquid (you cannot easily sell them), non-transparent (the values are hard to verify independently), and ultimately worthless — at which point the pension fund has been destroyed. Many victims only discover the loss when they reach retirement age and attempt to access their pension.

No legitimate investment offers guaranteed returns. Any claim of guaranteed returns — regardless of the asset class or the apparent credibility of the presenter — is an immediate red flag.

4. Clone Firms

A clone firm operates by copying the details — company name, FCA registration number, website address, and sometimes even the names of real employees — of a genuine, FCA-authorised firm. The fraudster then uses these details to present themselves as a legitimate regulated adviser.

Checking the FCA Register is not sufficient to detect a clone firm: the legitimate firm is on the Register, but the fraudulent firm is using its details. To detect a clone, it is necessary to contact the legitimate firm using contact details obtained independently from the FCA Register — not contact details provided by the person who approached you.

5. Overseas SIPP and QROPS Misrepresentation

For expats, one specific category of risk involves approaches to transfer UK pension funds to overseas pension schemes. While QROPS (Qualifying Recognised Overseas Pension Schemes) are legitimate arrangements recognised by HMRC, they can also be misrepresented. A fraudster may approach an expat claiming that transferring to an overseas pension will eliminate UK tax, provide access to the full fund immediately, or offer investment in high-return overseas property. None of these claims should be accepted without independent verification.

Legitimate QROPS arrangements are listed on HMRC's ROPS list, which is published and updated regularly. Any scheme proposed as a QROPS that does not appear on the ROPS list is either not a qualifying scheme or is fraudulent.

Red Flags: Warning Signs to Watch For

The following are warning signs that a proposed pension arrangement may be fraudulent:

Unsolicited contact: You did not seek out the adviser or firm — they approached you, by any means.

Pressure to decide quickly: Language such as "this offer closes Friday", "act now before the tax year end", or "limited places available" is designed to prevent you from taking time to investigate.

Guaranteed returns: Any specific guaranteed return figure (especially above the risk-free rate) is a warning sign.

Unusual investment types: If a pension is proposed to be invested in assets that are not widely available on mainstream pension platforms — particularly overseas property, physical commodities, or unusual alternative assets — ask detailed questions and seek independent verification.

A transfer to a pension scheme you have never heard of: If you are being asked to transfer your pension from a well-known provider to a small, unknown scheme, investigate thoroughly before doing so.

Requests for personal information or pension documents: Fraudsters sometimes ask for pension documentation in order to impersonate pension holders with providers.

Claims of special expertise about your type of pension or your country: Scammers targeting expats often claim specialist knowledge of overseas pension rules, tax treaties, or QROPS that sounds credible but is designed to establish trust.

How Scammers Target Expats

Expats with UK pension funds are a specific target demographic for pension fraudsters, for several reasons. First, expats are known to have UK pension assets that may be portable — making the pitch for a pension transfer plausible. Second, they are geographically distant from the UK professional networks and social circles that would normally provide a sense-check. Third, they may genuinely have legitimate questions about how to manage their UK pension from abroad — making an approach from someone purporting to offer expertise in overseas pension planning seem timely and relevant.

Approaches targeting expats commonly come through:

• Social media (Facebook groups for British expats, LinkedIn)
• WhatsApp groups in popular expat communities
• Seminars held in popular expat locations — often at a reputable-seeming venue
• Referrals through trusted members of the expat community (who may themselves be unwitting introducers)
• Approaches at golf clubs, social clubs or via email lists

We advise all clients to be especially sceptical of any pension-related approach that did not originate from a professional relationship they initiated themselves.

How to Verify Legitimacy

Before engaging with any pension adviser or firm, always check:

FCA Register (fca.org.uk/register): Confirm the firm is authorised, that the individual adviser is listed as an approved person of the firm, and that the firm's permissions include the regulated activities relevant to what is being proposed (e.g., "advising on pension transfers and conversions" for QROPS or DB transfer advice).

FCA Warning List (fca.org.uk/consumers/warning-list): The FCA publishes a list of firms and individuals it has warned about because they may be operating without authorisation or running a scam. Check any firm that approaches you.

HMRC ROPS List (gov.uk): For any QROPS proposition, verify that the specific scheme is on the current ROPS list — not just that the concept of a QROPS is legitimate.

Independent verification of contact details: If a firm claims to be a well-known, established organisation, verify their contact details from the FCA Register — not from any materials or website links provided to you by the person who approached you.

What to Do If You Suspect a Scam

Stop engaging: Do not transfer any money, hand over any documents, or continue the conversation. You are not obliged to be polite about ceasing contact.

Report to Action Fraud: Action Fraud (actionfraud.police.uk) is the UK's national reporting centre for fraud and cyber crime. Report the approach even if no money has been transferred.

Report to the FCA: The FCA accepts reports of suspected fraudulent or unauthorised firms via their consumer helpline and online reporting form.

Warn others: If you encountered the scammer through a social media group or expat community, consider alerting others — while being careful to report facts rather than accusations if you are uncertain.

What to Do If You Have Already Transferred

Act quickly. Contact the pension provider you transferred from — in some cases, if the transfer has not yet been fully settled, it may be possible to reverse it. Contact the receiving scheme to raise your concerns. Report to Action Fraud and the FCA immediately. If a financial adviser was involved in recommending the transfer, report them to the FCA.

If regulated advice was provided in connection with the transfer — even if the advice was bad or negligent — you may have a claim against the FCA-authorised firm under the Financial Services Compensation Scheme (FSCS), up to the compensation limits. This underlines why ensuring advice is genuinely FCA-regulated is so important.

How Global Investments can help

Our process for pension planning is transparent and verifiable at every step. Where UK-regulated advice is required it is provided by an FCA-authorised Pension Transfer Specialist we work with; we provide written documentation of everything we recommend, and we never initiate contact with potential clients by cold call, text message, or unsolicited social media approach. Every recommendation we make is explained in a written suitability report that sets out our analysis, the risks involved, and why our recommendation is appropriate for the individual client.

For clients who have received an unsolicited approach about their pension — or who have been shown a pension proposition by someone they know — we offer a second-opinion review. We will review the proposed arrangement, check the credentials of the firm involved, and give our honest assessment of whether it is legitimate and appropriate. We regard protecting our clients from fraud as part of our duty of care, and we take it seriously. Please always seek regulated advice before transferring or restructuring any pension arrangement; pension scams can be extremely difficult to identify, and the consequences of a fraudulent transfer are often irreversible.