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A guide to pension scams and financial fraud

Latest figures reveal that more than £17.5 million was lost to pension fraud in 2024, with an average loss of £33,848 per person. While the total cost of financial fraud remains relatively stable, more people than ever are being targeted. Unfortunately, sophisticated technology now means it’s harder to spot scams than ever before.

Updated: 07.07.26

By Brendan Tinney

This content was factually correct when written but may not reflect current developments or information.

Retirement planning

Organisations like the Financial Conduct Authority will regularly update advice on how you can protect yourself from scams, but your bank will also provide guidance, so it’s worth checking their websites for details, for example: 

With this in mind, it’s more important than ever to protect yourself. We look at some of the most common scams to be aware of and offer tips on how you can spot potential fraud.

What are pension scams?

The most common pension scams typically fall into one of three categories:

The pension ‘liberation’ scam

With pension liberation scams, criminals will offer to help you access money from your private pension before the current access age of 55 years (increasing to 57 from 2028). In these types of scams, fraudsters will encourage you to transfer your pension to another account (often abroad). When that’s done, they’ll ‘loan’ you an amount from your pension (for a fee) or simply steal your money outright.

This scam relies on people not knowing the rules around a private pension or understanding how the State Pension works. This is because generally, you won’t be able to withdraw money from a private pension until you’re 55 years old, although there are a few exceptions. Taking money out of your pension early can also leave you facing a 55% tax bill on the amount you withdraw.

The pension investment scam

Criminals will entice you with investment opportunities that promise high returns for minimal risk. Again, the ultimate aim is to get you to transfer your pension to one of their accounts.

Scammers may use certain words and phrases to make opportunities sound urgent, making you feel like you must act now before it’s ‘too late’. Typical language to look out for includes:

  • ‘One-off’ investments.

  • ‘Time-limited’ opportunities.

  • ‘Upfront cash incentive’.

  • ‘Low risk’ opportunities.

  • ‘Guaranteed’ returns (remember that all investments come with risk, and your returns can rise and fall).

Fundamentally, if an investment seems too good to be true, it usually is.

The pension review scam

This is when scammers offer you a free ‘pension review’ or ‘pension advice’ to get information about your pension. They will then use this to pose as you and transfer your pension to their account.

Bear in mind that since 2019, it has been illegal for companies to make unsolicited calls about your pension. If you receive any unexpected communication about your pension, ignore it – it’s almost certainly a scam.

Also, remember that anyone offering financial advice, including on pensions, must be registered with the Financial Conduct Authority (FCA). To find out whether a firm or an individual is authorised and has permission for the activities they are advertising, check the Financial Services Register.

What investment scams are there?

These are relatively straightforward to spot. Criminals will get in touch to offer high-return investment opportunities, often claiming there is little risk.

Scammers may try to incentivise you by saying they have ‘insider knowledge’ about certain stocks and shares, or they might convince you to make investments in gold, crypto assets, foreign currencies, real estate, or even commodities such as gas and oil. In all cases, you’ll be encouraged to hand over money which you’re unlikely to ever see again.

Don’t forget, anyone offering you financial advice must be authorised to do so. To protect yourself from investment scams, you can also check the FCA’s warning list of unauthorised firms that they’re currently aware of.

What are phishing, vishing, and smishing?

These are all methods criminals use to obtain sensitive information, which gives them access to your money. Usually, this means getting you to reveal usernames, passwords, or credit card numbers.

In all three examples, scammers pretend to be from a legitimate organisation or person, such as HMRC, your bank, a store you shop at, a friend, or a colleague.

  • Phishing is typically done by email.

  • Vishing (voice phishing) is a phone scam where criminals call you.

  • Smishing is a text-message scam that often includes a link to a fake website or a phone number to call.

What is authorised push payment (APP) fraud?

This is when scammers trick you into sending them a payment. They may hack into your email account to find details of the businesses you deal with, then pose as one of them to request payment.

A common APP scam involves criminals sending text or WhatsApp messages pretending to be a close relative and asking for money. Usually, these messages come with a sense of urgency.

If you do get an unexpected message asking for money, contact the person they claim to be directly. For example, if the message is supposedly from a relative, ring them on their usual number and ask them if they’re trying to contact you.

Another method of authorised push payment fraud is the invoice scam, in which scammers send fake invoices to businesses, hoping they’ll be paid.

Despite the number of APP fraud cases falling slightly according to the most recent UK Finance Annual Fraud Report 2025, the total amount lost was still staggering, totalling more than £450 million. However, since new APP reimbursement rules came into effect in 2024, individuals who have been scammed can get their money back (unless they are found to be grossly negligent).

If you’re asked to make a payment, always check that the request is legitimate – even if you were expecting the request. Verify that the correct company has emailed or messaged you and that their bank details are correct.

The rise of AI and deepfake financial scams

Research by credit reference agency Experian found that more than one third (35%) of UK businesses had experienced AI-related fraud in the last three months of 2025, up from 23% the previous year.

The government has also reported a significant increase in the use of deepfakes (fake videos and images generated by AI). In 2025, around eight million deepfakes were identified compared to just half a million in 2023. Amongst other uses, criminals use this technology to convincingly impersonate people’s loved ones, tricking them into handing over money.

Industry experts also warn that AI will only increase the rate of online fraud. Not only that, but the technology also enables fraudsters to scale their criminal activities, targeting more people faster than before.

How to protect yourself from scams and financial fraud

Consumer champions Which? offer a free scam alert service to help keep you updated about the latest scams.

You can also protect yourself by being aware of common tell-tale signs that scams often share, including:

  • Contact happens out of the blue, for example, being approached about your pension or savings without you reaching out first. No legitimate firm or adviser will do this, as it has been illegal for firms to cold call you about financial services since 2019.

  • There is a sense of urgency, for example, a time-limited offer or someone pressuring you to make a decision quickly. A professional will always allow you to make decisions in your own time.

  • Contact details appear vague; for example, the only postal address is a PO box, and the only telephone numbers are for mobiles. If a charity approaches you, you can check they’re genuine by searching the charity register.

  • Offers that promise high returns with minimal risk exposure or offers that you’ve been specially chosen to receive.

  • Look for spelling mistakes or grammatical errors in emails or other written communication. Also, carefully check web addresses, for example, an ‘o’ in a real address can easily be changed to a ‘0’, making it harder to immediately spot a fake link. You can find more about how to spot scam emails, texts, and websites at the National Cyber Security Centre.

If you want to report fraudulent or scam activity, you can do this via:

FAQs

Expert financial advice from independent advisers

If you’re not sure about any communication and suspect it might not be genuine, it’s always best to contact the relevant organisation directly. You should also use a telephone number or email on their official website (do not follow links or use contact numbers listed in a suspicious email).

As part of our financial planning services, our advisers are on hand to support our clients. If you are a client and receive unexpected or unsolicited contact about your financials, let us know, and we can look into it for you.

If you’re not yet a client, but feel you would benefit from independent pension advice, retirement planning or wealth management, you can speak to one of our independent advisers on a no obligation basis on 01603 967967.

The value of investments and any income from them can go down as well as up and you might not get back the original amount invested. The past is not a guide to the future. The value of tax benefits depends on your individual circumstances. Tax laws can change.

Need financial advice?

Whether you want to speak with one of our advisors or have a general enquiry, we're here to help.

Speak to us:  01603 967967

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