Warren Shute: How to avoid falling victim to pensions scammers

Warren Shute has advice to protect yourself against pension scammers. Picture: Getty Images/iStockphoto

Warren Shute has advice to protect yourself against pension scammers. Picture: Getty Images/iStockphoto


Anyone can fall victim to pension scammers - don't let it be you. Chartered wealth manager Warren Shute shares his advice.

Most people’s wishes for retirement are simple.

To have enough money so as not to worry about our bills, to treat our grandchildren and take a summer holiday is all most of us want – but the cost of this lifestyle seems out of reach for many.

So, when we’re offered a way to double our retirement fund, or to access a special opportunity, it opens our eyes and gets us excited.

This is how fraudsters prey on their vulnerable victims, painting pictures of a dream retirement and promises of spectacular returns, while rubbishing pensions and the regulated financial services sector.

According to Action Fraud, the UK’s national fraud and cyber crime reporting centre, a total of 253 victims reported that they had lost more than £23m to pension scammers in 2017. This equates to an average loss of £91,000 per victim.

How the scam works

There is no one way the scammers take advantage of their prey, so you should be vigilant in all cases.

But the general theme of these scams is as follows.

An unsolicited call, email or letter approaches you, selling you this wonderful new way to plan for your retirement or manage your pension pot.

It’s almost always unsolicited, so always ask: Why are they contacting me?

They offer you ways to ‘free up your pension fund’ or ‘get superior returns guaranteed’.

The headlines are false, eye-catching and unfair, so be aware. These are a scam. If it sounds too good to be true, it usually is.

The government announced a ban on cold-calling and texting for pensions in August 2017, but for various reasons this has not yet come into force.

However it’s widely expected to be come the norm later this year – but this is too late for many of the current victims.

Once you engage with the scammers, you follow, in part a regulated process that can make you think this is all normal and legitimate.

However, ensure you ask what company is providing the advice to you. They must be a Financial Conduct Authority (FCA) regulated firm and you can check them out on the FCA website.

Also ensure that your adviser, who you are speaking with, is regulated and not an introducer who outsources the regulated activities. Both firms and individuals providing regulated financial advice in the UK need to be registered with the FCA, so check them both out.

You may be offered a free review of your pension, where the conclusion is always that it is moved from the current provider to a provider that allows the scammers to manipulate and control the rules.

There are a couple of variations in what the scammers do with your money.

Either the scammers will tell you to ‘bust’ your pension and take all of your money out, tax-free, or they invest your pension money in high-risk, unregulated investments which can be attractive hotel complexes, overseas properties, currencies, alternative energy, cryptocurrency or other exotic investments.

It would be impossible to list all of the options you could be offered, but one theme is consistent: they are not the typical investment funds that you would expect.

Then once the money is transferred and invested, it’s often too late to reverse the transaction.

What should you do if a pension scammer approaches you?

If you receive an unsolicited communication regarding an investment or boosting your pension, immediately report it.

You can find information on what to do on the city watchdog website, the Financial Conduct Authority, or visit the Action Fraud website.

The Financial Conduct Authority’s Financial Lives report suggested that 107,000 people aged 55 to 64 could potentially have been victims of pension scams last year.

Don’t let scammers interfere with your retirement dreams. If it’s too good to be true, it often is.

If you want advice from a qualified and regulated financial planner, go to the CISI website at

If you think you have been a victim of a pension scam, report it at

Warren Shute is a chartered wealth manager and author of the personal finance book The Money Plan.

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