KEY LEARNINGS

  • Understand some of the common signs of pension scams and steps you can take to keep your pension safe.
  • Understand what happens to your workplace pension in the event your provider fails.

Read time

3 mins

Your pension is likely to be one of your biggest assets, so it’s crucial to keep it safe.

Scams can take many forms, especially for those recently retired or approaching retirement. But don’t be alarmed - if you learn the basics of how to identify them, it'll get easier to avoid them. There are a range of trusted and independent sources you can refer to if you feel like you are being targeted, such as MoneyHelper and The Pensions Regulator. Our website has more information on how to spot pension scams, some of the guidance includes:

 

Common features of pension scams:

  • Unsolicited cold calls, texts and emails from a person or organisation, about your pension – legitimate providers are highly unlikely to contact you out of the blue. Please be aware that an email may initially look like it's from your provider or someone you know, but often the actual email address is not as familiar.
  • Someone asking you to withdraw money from your pension for an investment opportunity
  • Anyone telling you to act quickly for the best deal or to stop something bad happening

 

How to protect yourself from scams

To avoid being caught out by a pension scam, make sure you follow these rules:

  • Check who you're dealing with before making any change to your pension.
  • Hang up and visit ScamSmart or call the Financial Conduct Authority (FCA) on 0800 111 6768 to see if the firm contacting you is legitimate. If they are, they won’t mind you hanging up and checking.
  • Don't give out any personal details if you receive an unexpected call. Once you’ve checked and confirmed it's legitimate, then call back on a number registered on their website or in your paperwork
  • Seek guidance by getting in touch with your pension provider or government-regulated bodies like Pension Wise or MoneyHelper.
  • Check the FCA's Financial Services Register to make sure that anyone offering you advice or other financial services is FCA-authorised, and that they are permitted to provide you with those services.

 

Watch our short film on how to spot a pension scam for more information or visit our page on pension scams to learn more about how to protect yourself.

What to do if you think you’re being targeted by a scammer

 

What happens to your pension if your company or provider fails?

In most cases, your workplace pension is protected.

If you have a workplace defined contribution pension which your employer set up for you, it will be with a third-party provider. This means if the company you work for fails, contributions you have already made in the scheme set up by the employer will be safe.

It’s likely you will have been enrolled into a pension scheme with a major pension provider. In these schemes, members are covered by the Financial Services Compensation Scheme. In the unlikely event a provider fails, your pension pot(s) with that provider are protected for 100% of their value.

If you have a defined benefit scheme (where your employer is required to pay you an agreed income based on final salary or average earnings) you are somewhat protected if the scheme were to have insufficient assets to meet the guarantees for all its members. How much protection you have is dependent on your circumstances and is determined by rules set out by the Pension Protection Fund.

Watch the video by our retirement expert Andre where he discusses the protection around workplace pensions.

Scottish Widows Be Money Well is committed to providing information in a way that is accessible and useful for our users. This information, however, is not in any way intended to amount to authority or advice on which reliance should be placed. You should seek professional advice as appropriate and required. Any sites, products or services named in this module are just examples of what's available. Scottish Widows does not endorse the services they provide. The information in this module was last updated on 19th July 2022.

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