19/12/1610 tips to avoid pension scams

Most of us would like to believe we can spot a financial scam. But the evidence suggests that 88% of us miss the warning signs.

Most financial scams, and miss-selling of financial products, start with a cold call, or an unsolicited text or email.

We are delighted that the government is finally acting to ban cold calling in respect of pensions. But an outright ban is still some months away, so you still need to be able to spot the signs and know how to avoid getting caught.

Here are our top 10 tips to help you do just that.

Tip 1: Never take action or advice after a cold call

11 million cold calls in respect of pensions were made last year. That’s a staggering number and means 1 in 3 of us received one (Source:

These calls often take a similar path. Perhaps offering a free pension review or a claim that your pension is underperforming, that charges are too high, or that new legislation means a review is vital.

No matter how convincing they are, avoid engaging with cold callers. Politely end the call, or just put the phone down; the risk of being scammed is too great.

If your mobile phone allows it, we would also recommend immediately blocking their number, so you won’t be bothered in the future.

Tip 2: Ignore unsolicited texts or emails offering advice

Scammers also use unsolicited texts and emails; our advice is the same as for cold calls.

Don’t engage, simply click delete, block the number or email address and move on with the rest of your day.

Tip 3: Check the FCA Register

All financial advisers in the UK are authorised and regulated by the Financial Conduct Authority (FCA).

Before you start working with an adviser, you should confirm that they appear on the FCA register and that it contains nothing which should concern you.

You can do this by clicking here.

If you would like to read the Adcock Financial entry in the FCA register, you can do so by clicking here.

Tip 4: Watch out for warnings, claims and promises

Pension scammers need to find a way to hook you in.

This is generally done in one of three ways.

Firstly, they may try to worry you, by suggesting that your pension is under-performing, the charges are too high, or in some other way needs attention.

Secondly, they may claim that changes to legislation mean you need a review, or that you are in some way missing out on an opportunity. In this regard, Pensions Freedom has given cold callers a new lease of life, with many mentioning the changes in their script.

Finally, they may try to tempt you, making promises of high, guaranteed, returns.

Whatever their tactics, simply ignore them. If you are in any doubt, contact your regular adviser. If you don’t have one, use a reputable source such as Unbiased or VouchedFor to find one; or contact us!

Tip 5: Be wary about ‘free’ pension reviews

Pension scammers will invariably offer you a free pension review.

Think about it for a moment. If the review is free, the business offering it must sell you something to earn any money. That immediately makes them a salesperson rather than an adviser.

Not all free pension reviews are a scam, but all scammers offer a free pension review.

Tip 6: If it sounds too good to be true, it probably is

Scammers will often claim to offer investments offering high returns, a promise that your capital is guaranteed, or both.

Basic investment logic dictates that risk rises in line with potential returns; a low risk, high returning investment, simply isn’t possible.

If it sounds too good to be true, then it probably is; trust your gut feeling and walk away.

Tip 7: Avoid ‘exotic’ and unusual investments

Many scams and miss-selling involve overseas property or exotic investments such as car parking spaces, bamboo, forestry, farm land, plantations. We’ve even spoken to people who have been asked to invest in burial plots!

The more exotic and unusual an investment the riskier it will be.

Our advice would be to avoid them, no matter who offers the opportunity to you or how tempting the salesperson makes the proposition sound.

Tip 8: Avoid being put under pressure

Scammers want you to act quickly; the longer you take to decide the less likely you are to invest.

You can therefore expect scammers to use high pressure tactics. We’ve even heard of scammers sending couriers round to a potential victim’s house to get documents signed.

No reputable financial adviser will put you under pressure, they will give you time and space to make decisions. They will also put their advice in writing, something scammers rarely do.

If you feel under pressure, it may well be a sign that you are being scammed.

Tip 9: Look out for certain words or phrases

Pension scammers and sales people will use certain phrases, designed to hook you in.

Listen out for:

  • Pension liberation
  • Free pension review
  • Loan
  • Loophole
  • SIPP approved (Self-Invested Personal Pension)
  • HMRC approved
  • FCA approved
  • One-off investment
  • Unique opportunity
  • Ethical

Of course, if you have followed tips one and two, you will have put the phone down or deleted the email or text. In which case, you won’t get to this stage and you certainly won’t be scammed out of your pension.

Tip 10: Find your own financial adviser

If you have a financial problem which needs solving, or would like advice about your pension and investments, there are many ways to find a reputable financial adviser.

Start by getting recommendations from friends and family. Research the recommended advisers online by checking out their page on the FCA register, analysing the Google search results and looking at their website.

You could also use directories such as Unbiased or VouchedFor to find an adviser.

Alternatively, and forgive us for the shameless plug, if you are a business owner, senior executive, or close to retirement, you could simply call us on 0208 9732410, we would be delighted to chat to you.