Common pension scams in the UK

Annuity scams

An annuity’s a type of insurance product that you can buy using some or all your pension savings. It then pays you an income for a fixed period, often for life. What you’ll receive depends on the rate the annuity provider pays. 

With an annuity scam, a fraudster might try and get you to buy a product that doesn’t exist. To tempt you to buy, they might promise you a higher rate than what’s available across the market.

Once you give them money to buy, you’ll then not hear from them again. And of course, you won’t receive the income you were promised.

Or the annuity product itself may be real. However, the person selling could still be a fraudster. 

Scammers may target those looking to buy an annuity and suggest that they buy products at an inflated cost or products that aren’t suitable for them. They might promise a cash incentive or signing bonus to convince you to sign.

Traits of an annuity scam

While the specific annuity scam could differ between fraudsters, there are a few common signs.

• Higher-than-usual annuity rates - annuity rates are usually set based on interest rates across the economy. So, if someone’s claiming to have a rate that exceeds what other providers are offering, it could be fraudulent. If it sounds too good to be true, it probably is. Use MoneyHelper’s annuity comparison tools to see what rates you may be able to access to help you work out whether an opportunity’s real.
• Limited-time offers on products that aren’t available elsewhere - scammers often create artificial time pressure to make you act quickly before you’ve properly thought a decision through. They might also say you won’t be able to find their deal anywhere else. Take your time and don’t be rushed into committing if you’re not sure.
• Cash incentives or signing bonuses - legitimate providers are unlikely to say there are bonuses or cash incentives for signing up. If there are, they’re usually built into the rate or the product as a whole, not as a separate benefit you can access. If someone’s offering you these to sign up to an annuity product, be cautious.

Early pension release scams

Also known as ‘pension liberation’, an early pension release scam involves a fraudster telling you that they can help you access your pension benefits early.

With defined contribution pensions - that’s most modern workplace and personal schemes - you can usually access your fund from 55 (rising to 57 from 2028).

As for defined benefit (also known as ‘final salary’) pensions, the age at which you can access your pot’s also fixed. That’s often at 60 or 65, although it’ll depend on the specific scheme.

There are few exceptions to this, such as if you’re critically or terminally ill. In these circumstances, you may be able to access your savings sooner.

But with pension liberation, the scammer might suggest they can do this even earlier.

They might claim to be able to do so using tax loopholes. Or they might suggest transferring to an unregulated scheme.

In return, they’ll usually ask for a percentage of your pension savings. That could be 30%, or maybe even more.

If they succeed in helping you access your pot ahead of your set pension age, it’ll usually be classed as an unauthorised withdrawal. That’ll attract a tax charge of up to 55%.

Combined with their ‘commission’, that could leave you with as little as 15% of your savings.

Traits of an early pension release scam

Generally speaking, anyone who tells you they can help you access your pension early is probably a scammer.

It’s extremely difficult to do so without penalty. Plus, it might not even be suitable for you to access your pension earlier - drawing your fund sooner could run the risk of you depleting it faster.

With defined benefit pensions, you’d be giving up a secure income for life, plus potentially other safeguarded benefits.

That’s why it’s a legal requirement to take independent financial advice if you want to transfer a defined benefit pension worth more than £30,000.

The Financial Conduct Authority (FCA) - the UK’s main financial regulator - is even stricter. Its guidance to advisers is that they should start from the position that such transfers aren’t suitable.

No legitimate adviser would contact you and suggest that they could liberate your pension.

As a result, any time someone tells you they can help you access your pension early, it’s likely to be fraudulent.

Pension review scams

With a pension review scam, a fraudster may claim to be from an authorised agency offering a review of your savings as you approach retirement.

It’s true that you can get a free appointment with Pension Wise from age 50. This is a government-backed scheme that offers information and guidance on defined contribution pensions as you approach the age when you can access your pot (55, rising to 57 from 2028).

Pension Wise won’t provide specific, tailored advice. Nor will it proactively contact you - you can get in touch from age 50 if you’d like an appointment. But it can still be a helpful resource for understanding your options as you approach retirement.

Fraudsters use services like Pension Wise to pretend that they’re offering a similar service. They’ll get in touch with you and tell you they can provide a review of your retirement savings.

However, they’ll often then suggest transferring your money into an alternative, usually high-risk, scheme. It might be advertised as containing unusual investments or having unique tax benefits.

Instead, the scheme might not exist at all. And, when they do, they’re typically unregulated and poorly diversified. That can lead you to lose money on your investments, or for the schemes to fail entirely.

Traits of a pension review scam

Pension reviews can be trickier to spot. Many legitimate firms will want to help you with your savings. Fortunately, there are still signs to look out for.

One giveaway is contact out of the blue. Be wary of anyone who contacts you unexpectedly and offers you a pension review. Pension cold calling’s been illegal in the UK since 2019. So, if they phone, you know it’s not legitimate.

Likewise, keep an eye out for language around high investment returns or other promises that sound too good to be true. 

What to do if you’re a victim of a scam

If you think you’re a scam victim, then don’t panic. It’s important to act quickly and take the following steps.

• Contact your financial provider - whether that’s your pension provider or bank, get in touch with them immediately. They may be able to stop transactions and recover funds before you lose anything.
• Contact the police - if the scammer’s in your area or you’ve transferred money in the last 24 hours, call 101, the non-emergency police number. Call the emergency line on 999 if you’ve been threatened or feel in danger.
• Tell Report Fraud - formerly Action Fraud, Report Fraud’s a service that lets you log cybercrime and fraud. Report Fraud may not be able to help you recover your funds. But informing them could help put out a warning about the scam, potentially protecting someone else.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Last edited: 05-08-2026