Pension and investment scams: how they work and what to do if you've been contacted

Scammers do not target people over 50 because they think you are foolish. They target you because you have the pension. The good news is that the patterns are well documented, and most collapse the moment you do one boring thing: stop, and check. This is general information, not financial advice.

The two pension scams that do most of the damage

The FCA (the UK’s financial regulator) describes two main types.

Early pension release. Someone offers to get at your pension before the minimum age, currently 55 and rising to 57 in 2028. The money goes into a scheme, often overseas, the “helpers” take fees the FCA puts at around 30%, and because the withdrawal is unauthorised you can face a tax charge of up to 55% on top.

The free pension review. An unsolicited offer to “review” your pension that ends with a recommendation to move it into something high-risk: overseas property, forestry, care homes. Returns are described as guaranteed. They are not.

The US versions are the investment scams the FTC lists: cryptocurrency schemes that start on social media, training programmes selling a “secret method or proven system”, real-estate developments that never get built, urgent pitches for precious metals. The FTC’s line to remember: “Investments always involve risk. There are no guaranteed returns.”

The warning signs

The FCA’s red flags for scams read like a script, because they are one:

• Unexpected contact, by phone, email, text, post, social media or doorstep.
• Pressure to act quickly: a bonus for signing now, or “limited availability”.
• Unrealistic promises: “Fraudsters often promise tempting rewards, such as high returns.”
• An exclusive opportunity you should keep quiet about.
• Flattery and false friendship.
• Emotional manipulation, so you decide in a hurry.
• False authority: claiming to be authorised and sounding knowledgeable.

MoneyHelper adds the practical tells: documents sent by courier for signature, contact details that are only a mobile number or PO box, and callers impersonating bodies such as Pension Wise.

The FTC boils it down to four things scammers do: pretend to be an organisation you know, say there is a problem or a prize, pressure you to act immediately, and tell you to pay a specific way, typically cryptocurrency, wire transfer, a payment app or gift cards. That last one alone is reason to walk away.

The one rule in the UK: hang up

Cold calling about pensions has been banned in the UK since January 2019. The FCA puts it plainly: “If you get a call out of the blue (a cold call) about your pension, the safest thing to do is hang up. It’s illegal and probably a scam.” Legitimate firms do not do this.

Then check. Use the FCA’s Firm Checker to confirm the firm is authorised and compare the reference number and contact details with the ones you were given, because “some firms pretend to be authorised firms, so always use the contact details on the Firm Checker”. If the register shows different phone numbers from the letter in your hand, the letter is the fake. Email and text offers, the FCA says, should simply be ignored.

The equivalent in the US: check the licence

The FTC’s advice is to resist pressure, research the programme and the people online, never rely on testimonials, and check registration through Investor.gov (securities) or the CFTC (commodities). And before you do anything, “stop and talk to someone you trust”. That sentence has probably saved more money than any regulator.

If you have been contacted

Treat it as a near miss and report it. In the UK, MoneyHelper says to report to Report Fraud on 0300 123 2040 or at reportfraud.police.uk, and to the FCA on 0800 111 6768; in Scotland, Police Scotland on 101. In the US, report to the FTC at ReportFraud.ftc.gov or the FBI’s Internet Crime Complaint Center at ic3.gov and, for investment fraud, the SEC at sec.gov/tcr.

If a transfer is already in motion, MoneyHelper’s first step is to “contact your pension provider immediately”.

If you have already paid

Speed matters more than embarrassment. The FTC’s guidance by payment method:

• Card: report to the issuer or bank immediately and ask for a refund.
• Bank transfer: ask the bank at once to reverse it and try to recover the money.
• Payment app or wire transfer: report to the company and ask for a reversal or refund.
• Gift cards: ring the number on the card; keep the card and receipt.
• Cryptocurrency: contact the exchange or ATM operator immediately; the FTC is honest that crypto “lacks the same legal protections as credit cards”.

In the UK, MoneyHelper also runs a financial crimes support line on 0800 015 4402 for help rebuilding a pension and exploring recovery. It cites Report Fraud data putting the average loss to pension scams at around £47,000: the size of the thing you are protecting.

Building the habit

Decide now, in a calm moment, that you will never move pension or investment money on the strength of an unexpected contact, and tell one other person so they can hold you to it. Scams work by creating a rush; a rule made in advance removes it.

Our guide to finding lost pensions and retirement accounts explains why “consolidation” pitches are a favourite hook, and our complete guide to money after 50 puts the one rule in context. If you want your whole money picture in one place, so a scammer’s “opportunity” has something real to be measured against, the Money Reset workbook is built for that.

This week

1. Bookmark the FCA Firm Checker (UK) or Investor.gov (US).
2. Tell one person your rule: no pension or investment moves on unexpected contact, ever.
3. Had any unsolicited pension or investment contact recently? Report it today.
4. If money has already gone, ring your bank or card issuer first, then report, both within the day.
5. Keep the rule by the phone: hang up, check, call back.

Updated 6 October 2026: added the FBI’s Internet Crime Complaint Center (ic3.gov) as a second US reporting route.

Corrected 7 October 2026: the FCA retired the ScamSmart name in January 2026; its pages are now ‘Protect yourself from scams’.