Scam warning as Britons lose £50,949 of their retirement savings and risk huge tax bill | Personal Finance | Finance

In just the first six months of 2021, an estimated £2.2million was stolen from thousands of people by pension scammers. With losses from these scams averaging at £50,949 per person, here are the warning signs to look out for.

Some occupational pension scammers ask savers to transfer their entire pension pots into single member occupational schemes, and many promise savers early access to their money through a “loophole”.

Not only can this see savers draining their money into a scammers’ bank accounts but it can also mean they are hit with a high tax bill from HMRC if they end up using the ‘loophole’ to withdraw the money before they turn 55.

Any savers who believe the offer they’ve received could be a scam are advised to contact the Financial Conduct Authority before making any transfers or providing any details. 

The FCA regulates firms and individuals that are legally able to provide financial services and advice. 


Often scammers will pose as these types of advisers and can often have very sophisticated websites and fake certification that looks real.

As such, it’s recommended people always check with the FCA on whether the person or company they are talking to is actually authorised to carry out the services they are offering.

The FCA also regulates self-invested personal pensions, otherwise known as SIPPs, as well as personal or contract-based stakeholder pension schemes. 

The Financial Services Compensation Scheme (FSCS) is also in place to protect individuals who have been advised incorrectly by a person or business that is authorised by the FCA.

This scheme can award up to £85,000 per claim but overseas advisers and investments aren’t usually covered by the FSCS. 

Cold calling is also a major warning sign for any savers as using this marketing method for pension schemes is illegal. 

The cold call ban was introduced in 2019 and since then the number of pension scams carried out with cold calls has reduced. 

There are similar methods of contact that are equally suspicious, such as being contacted through social media.

Savers looking to transfer into a long-term pension scheme should do a fair amount of research to certify the company they are doing it with. That’s because in long-term scams, the victims often don’t realise they’ve been scammed until years later.

If a person has fallen victim to a scam, there are methods and procedures to follow, such as reporting fraud or cybercrime to Action Fraud for scams that have already happened in England Northern Ireland and Wales.

In Scotland, one can call 101 or Advice Direct Scotland to report the scam. 

While it may sometimes be impossible to retrieve the lost funds, reporting a scam enable authorities and law makers to create better safeguards for future potential victims and prosecute scammers better.

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