Pension cold-calling is now banned, but that does not mean the fraudsters trying to part you from your retirement funds have gone away.

After two years in the pipeline, it has finally become illegal for firms to cold-call people about their pensions. The ban, which took effect in January this year, is a long-awaited move to crack down on pension scams, whereby silver-tongued fraudsters phone unsuspecting individuals and persuade them to part with their retirement savings.

Since the government introduced new pension freedoms in 2015, allowing people much greater flexibility in the way they access their fund and take an income, pension-related fraud has increased dramatically. Around 107,000 people aged between 55 and 64 may have been victims of pension scams in 2017, according to the Financial Conduct Authority’s Financial Lives report1, with an average loss for victims of over £90,0002.

So the introduction of legislation banning cold calls, with fines of up to £500,000 for firms who breach the rules, is good news for consumers. As David Loosemore of the Pensions Advisory Service comments: “It is a useful step towards making life more difficult for pension scammers, as it will enforce the message to the general public that any unsolicited contact by phone, email or social media is illegal, and that they should take no action."3

However, the ban is by no means the end of the story. Professional fraudsters do not rest on their laurels and will be thinking laterally to sidestep the new rules. So we all need to be alert to the continuing risk of being parted from our retirement savings.  

The [cold-calling] ban is by no means the end of the story.

It is those approaching retirement who are most at risk. Kate Smith, Head of Pensions at Aegon, says: “Scammers prey on the vulnerability of those at, or nearing retirement age, who may be looking for financial advice or a pension review, but be unsure about where to go for trusted guidance.”4

Typically, scammers talk people into withdrawing their pension funds and putting them into high-risk or even non-existent investment schemes with the promise of attractive returns. Historically these alluring opportunities have come in many guises, such as the sale (at inflated prices) of rooms in hotels still being built in ‘up-and-coming’ tourist areas such as Cape Verde. Other so-called investment opportunities have included burial plots, truffle tree farms, bitcoin and storage pods, among others.

“Individuals are enticed to transfer money with the promise of cash, but fraudsters run off with the funds, and it can be years before people find out that they have given their money to a scammer,” says Smith.  

Criminals may also persuade victims to transfer their pensions (including final salary pensions) to other, fraudulent schemes. Loosemore gives the example of Mr R, who was encouraged to move his final salary pension worth more than £60,000 into another apparently legitimate scheme, which proved to be a scam. He lost his entire pension. 

There are other instances where people are convinced to move money into technically legal but inappropriate investments, with insufficient advice on the costs or risks involved. “In these instances the pension scammers have deliberately misled the customer,” Loosemore adds.

Smith warns that the ban on cold-calling is likely to result in more professional and sophisticated tactics. “For example, fraudsters are increasingly using social media as a tool to entice people, initially getting in touch to offer a pension review before following up with a call. The reality is that professional fraudsters will always try different tactics, including moving offshore to avoid UK legislation.”

Calls from firms based outside the UK (unless they are made on behalf of a UK company) are not covered by the cold-calling ban. This means that the Information Commissioner’s Office (ICO), the body responsible for policing these rules, is powerless to take action against them. However, Loosemore says the ICO ‘has arrangements with international regulators to enable enforcement action’ in such cases.

There are also exceptions to the ban, including calls from FCA-authorised firms, trustees or managers of occupational or personal pension schemes, or situations where the call recipient has an existing relationship with the caller. All can provide a toehold for determined fraudsters. 

As Smith points out, “Scammers can be highly convincing, so it is vital that people are armed with knowledge and have the confidence to reject any offers they receive, even if someone they know tries to talk them into it.” Fraudsters may also make use of information about where your pension pot is held or your employer, or claim to be FCA-authorised, making it seem as if it is a legitimate call. 

She emphasises the importance of being on your guard against any offers that sound too good to be true – particularly those promising the likes of ‘tax advantages’, ’loopholes’, ‘unique investment opportunities’ or ‘high returns’. “People should not feel pressured, persuaded or pushed into making any decisions,” she adds.

Scammers can be highly convincing, so it is vital that people are armed with knowledge

As Nigel Peaple, Director of Policy and Research at the PLSA, comments, it is important to recognise that the new rules, while they have made life more difficult for criminals, have not made the danger go away. “The ban does not address the central problem – that being a registered pension scheme is no proof of being a legitimate pension scheme5,” he says. 

So what should you do if you receive an unsolicited approach from someone regarding your pension? The best thing is simply to hang up the phone and block further calls, and similarly ignore and block emails or texts. 

If the caller sounds legitimate, ask for their number and take the time to check they are FCA-authorised on the FCA Register ( If you have concerns, check the FCA’s warning list on the Scam Smart website ( and the FCA’s list of warnings from foreign regulators and report your suspicions to your pension provider and Action Fraud (, 0300 123 2040). More generally, cold calls can be reported to the ICO ( 

Finally, if you already have a pension proposal in progress but think it might be fraudulent, speak to the Pensions Advisory Service on 0800 011 3797. If you have already authorised a transfer, contact your pension provider immediately and ask that no action be taken except with your written authority. Please also report the cold caller to Action Fraud. 



1 The financial lives of consumers across the UK 

2 Regulators warn public of pension scammer tactics as victims report losing an average of £91,000 in 2017

3 Email correspondence, 19 January 2019

4 Email correspondence, 18 January 2019

5 Email correspondence, 16 January 2019