Millions of Britons could be exposed to an increased risk of scams after the Government’s decision to expose unused pension pots to Inheritance Tax (IHT). That’s according to a thought-provoking article in Pensions Age, which revealed research carried out by Standard Life.
It found there was now a heightened sense of uncertainty around pensions following the Chancellor’s announcement that unused pension pots will be included in IHT calculations after 6 April 2027. This means Britons may be more susceptible to scams as criminals position their scams as a way to minimise a future IHT liability.
With this in mind, read on to discover three ways fraudsters may try to entice you to talk to them about your pension pot, and how you can ensure you don’t fall victim to their scam.
Pension liberation
If you have a Defined Contribution (DC) pension, you can typically access it when you reach the Normal Minimum Pension Age (NMPA). This is currently age 55, rising to 57 from April 2028. However, some criminals may offer schemes they claim will release your pension cash early.
What they won’t tell you is that accessing your pension before reaching the NMPA is likely to result in substantial tax charges, which could significantly reduce the value of your pension fund. Furthermore, fraudsters may charge extremely high fees of up to 30%, which would decrease the size of your pension pot even further.
Clone firm scams
This is where fraudsters establish bogus firms that use the same name, address and firm reference number of real companies authorised by the Financial Conduct Authority (FCA). They may even create a website and marketing material that’s very similar to the genuine advice company.
For this reason, you should always check the adviser you are talking to works for the bona fide and authorised company by contacting them directly. We’ll look at how you can do this in a moment.
Free pension reviews
Fraudsters sometimes offer free pension reviews, with the aim of recommending that you transfer your pension into high-risk funds, using the promise of higher returns. Fraudsters use this tactic as it’s easy to mistake it for the legitimate free appointments offered by MoneyHelper, a government-backed service that provides impartial advice to over 50s.
Given the Government’s decision to include unused pension pots in Inheritance Tax calculations after April 2027, it’s likely scammers will now claim they can also help reduce exposure to the tax.
Always remember that switching to high-risk funds significantly increases the chance of your pension pot plummeting in value. Worse still, you could lose all of it. As such, if you’re offered a pension liberation scheme or given advice to transfer your retirement fund into a high-risk fund, alarm bells should be ringing.
Please remember that if you get a cold call about pensions it’s a scam, as this practice is banned in the UK.
If you're contacted by fraudsters, there are steps you can take
The following are actions that you can take if you believe you’re being contacted by scammers, which could ensure you do not fall victim to a pension scam:
reject unsolicited calls, emails, text messages or visitors to your door
ensure that the person or firm you’re dealing with is regulated by the Financial Conduct Authority (FCA) by checking its register
check the FCA warning list
if you’re transferring your pension, ask your current provider to check the new scheme's HMRC registration status to make sure it’s real and authorised
check the internet and social media to see if complaints have been made about the adviser, firm or investment
look at the FCA’s ScamSmart website
Actions you can take if a criminal makes contact
If you ever suspect you’ve been contacted by a scammer, end the conversation at once. If you receive a call or text on an iPhone or Android phone, you can report it to your provider by texting ‘call’ to 7726. You’ll then receive a message asking you for the scam number.
For scam calls received on WhatsApp, you can report the contact by going to the number and tapping 'report contact' and 'block'. You can also report scam calls to Report Fraud (formerly called Action Fraud) or call the police on 101 if you’re in Scotland.
Talk to a bona fide financial adviser
One of the best ways to protect yourself from pension scams is to talk to a bona fide financial adviser on the FCA register of regulated companies. As one of the UK’s largest independent financial advice companies, we can help you with your pension and provide peace of mind that you are talking to a company that puts your needs first.
Our advisers will explain your options using clear language so that you can plan for the retirement you want. If you would like to discuss your financial security in retirement, or the implications of your pension potentially becoming liable to IHT, please call 0333 010 0008 and we’ll arrange a no obligation initial meeting with one of our independent financial advisers.
6 May 2026