Case Study: How Brian Nearly Lost His Pension to a Scam, and What Stopped Him (2026 Guide)

Pension scams usually start with unexpected contact, a promise of high or "guaranteed" returns and pressure to act quickly. Cold calling about pensions has been against the law in the UK since January 2019, so any unsolicited call about your pension is a serious warning sign. This illustrative example shows how a typical scam unfolds, the red flags to look for and the checks that can protect a defined benefit (DB) pension.

Quick summary

• Illustrative example: "Brian", 54, former manufacturing worker (a hypothetical person)
• Pension: Deferred DB pension with a former employer, with a transfer value (CETV) of £128,000
• Situation: Cold-called by an "investment adviser" promising 12% a year
• Red flags: Unsolicited contact, overseas investment, pressure tactics, a false FCA number
• Outcome: The scam is spotted before any transfer and the DB pension stays where it is
• Key lesson: Cold calls about pensions have been banned in the UK since 9 January 2019

Pension scams can do lasting harm, and money transferred into a fraudulent scheme is rarely recovered. Imagine Brian, a hypothetical deferred member who comes within days of transferring his whole defined benefit pension into a fraudulent investment.

His story illustrates how convincing modern pension scams can be, and why anyone contacted out of the blue about their pension should treat it as a red flag.

Brian's background

Illustrative example: Brian is 54, a former mechanical engineer from the East Midlands who took voluntary redundancy from a large manufacturing company three years ago. He now works part-time as a contractor and has largely forgotten about a deferred defined benefit pension he built up over 18 years with his former employer.

His deferred pension is a guaranteed income of about £7,400 a year from age 65, increasing each year in line with RPI inflation up to a cap of 5%. When he later requests a quote, his Cash Equivalent Transfer Value (CETV) is £128,000.

Brian is practical and level-headed, which is exactly why his example is useful. Fraudsters often target people like him: approaching retirement, not following pension rules closely, and holding a meaningful pension they don't think about day to day.

Important: This is a hypothetical example based on common pension scam patterns described by the FCA, Action Fraud and The Pensions Regulator. Brian, the firm and the fund are invented. The figures are examples only.

The initial contact

Brian receives a phone call on a Tuesday afternoon. The caller introduces himself as "James" from a company with a respectable-sounding name, and describes himself as a "pension freedom specialist". He says he has been reviewing pension holders in Brian's area and has "identified an opportunity" to improve Brian's retirement income.

The conversation is professional, friendly and knowledgeable. James mentions the 2015 pension freedoms, talks about the limitations of "old-fashioned" defined benefit pensions, and suggests Brian's £128,000 could be earning "12% a year guaranteed" in an overseas investment fund.

Brian doesn't hang up. He finds himself agreeing to a follow-up meeting.

Key point: Cold calling people about their pensions has been banned in the UK since 9 January 2019 under the Privacy and Electronic Communications (Amendment) Regulations 2018, unless you already have a genuine relationship with the caller or have specifically agreed to be contacted. An unexpected call about transferring your pension is a strong sign of a scam, however legitimate the caller sounds.

The red flags Brian could have spotted

Looking back, there are eight warning signs Brian either missed or dismissed at the time.

1. Unsolicited contact

Regulated financial advisers do not cold call people about their pensions. The moment Brian receives an unexpected call about his pension, that is the first red flag, and the call itself breaks the law.

2. "Guaranteed" high returns

A promise of 12% a year "guaranteed" is not realistic for a legitimate investment. Higher potential returns always come with higher risk, and investments can fall as well as rise. Any promise of unusually high, guaranteed returns is a hallmark of fraud.

3. Overseas or unusual investments

The proposed investment is an "offshore commercial property development fund" abroad. Overseas property, unlisted schemes and other unusual investments are often used in scams because they are hard to value, hard to trace and hard to get money back from.

4. Time pressure

Brian is told the "window closes in three weeks" and that other local pension holders have already committed. This is a classic pressure tactic designed to stop you taking time to check the firm or speak to someone you trust.

5. No genuine FCA registration

James gives a company name and a website, but the FCA registration number he quotes doesn't match the company's details on the FCA Register. This is "clone firm" fraud, where fraudsters pretend to be a genuine authorised firm.

6. Upfront fees

Brian is asked to pay a £500 "processing fee" before anything else happens. A demand for an upfront payment to an unverified firm, especially by bank transfer, is a warning sign. Genuine regulated firms set out their charges clearly in writing and you can check who they are before you pay anything.

7. Discouraging other advice

When Brian mentions he might speak to an independent adviser first, James says it would "complicate the process" and that advisers "don't understand these specialist opportunities". This is a major warning sign. Legitimate firms are happy for you to check them out and take time.

8. Requests to keep it confidential

Brian is told the scheme is "not widely available" and that he should keep it private because it is for "selected investors only". Fraudsters discourage people from talking to family or advisers who might spot the fraud.

What stops Brian

Brian almost signs the transfer papers. What stops him is a passing comment from his brother-in-law at a family dinner: "Aren't those cold calls about pensions illegal now?"

That evening Brian looks up the firm on the FCA Register and reads the FCA's ScamSmart guidance. He also rings his pension scheme to ask about the transfer request. When he compares the paperwork with what he has read, the problems become clear.

What a careful check of the paperwork might show

• The firm is a clone of a genuine FCA-authorised firm: the same name, but a different address and contact details
• The overseas property fund is not listed on any regulated exchange and is not authorised by the FCA
• The fund documents contain no audited accounts, no clear trustee structure and no way to get money out, all red flags for an unregulated investment
• The transfer form would give the fraudsters control of Brian's pension money
• The phone number traces to an internet service with no verifiable UK address

Pension schemes also carry out their own checks. Since November 2021, trustees have been able to pause or refuse a transfer where there are red flags, and they may ask a member to attend a guidance appointment with MoneyHelper before a transfer can go ahead.

What regulated advice would involve

Because Brian's DB pension is worth more than £30,000, the law requires him to take regulated advice from an FCA-authorised adviser with the pension transfer permission before any transfer can proceed. This advice requirement was introduced by the Pension Schemes Act 2015 to protect members of DB schemes from irreversible decisions they may later regret.

If Brian took regulated advice, the adviser would collect detailed information about his circumstances and produce an Appropriate Pension Transfer Analysis (APTA) and a Transfer Value Comparator (TVC), as the FCA requires. In a case like Brian's, a regulated adviser would typically weigh:

• The proposed investment: an unregulated, unaudited overseas property fund that would not be a suitable home for pension savings
• The benefits being given up: an inflation-linked income for life, a spouse's pension on death and Pension Protection Fund protection
• His needs: whether Brian has any goal that his DB pension and other savings cannot meet without a transfer
• The FCA's starting assumption that a transfer is unlikely to be suitable for most people

Likely outcome of regulated advice: keep the DB pension. Even if the investment were genuine, an adviser would be unlikely to conclude that giving up Brian's guaranteed income and spouse's pension is in his best interests. Brian should also report the approach.

What happens next

In this example, Brian reports the firm to Report Fraud (formerly Action Fraud), reports the clone firm to the FCA, and lets his pension scheme and The Pensions Regulator know about the approach.

His DB pension remains intact. From age 65 he can expect around £7,400 a year, increasing with inflation up to the cap, for life, with no investment risk and with PPF protection if his former employer fails.

Key point: Once pension money has been transferred to a fraudulent scheme, getting it back is extremely rare. Prevention is the best protection.

The scale of the problem

Pension scams remain a serious problem in the UK. The FCA, The Pensions Regulator and Action Fraud regularly warn that:

• Scams are under-reported, because many victims don't realise they have been scammed for years
• People aged around 45 to 65 with sizeable pensions, including those recently made redundant or approaching retirement, are common targets
• Common tactics include cold calls, social media adverts, unexpected offers to review your pension and clone firms

The FCA's ScamSmart campaign explains how to spot and avoid pension scams. Its core message is to be very wary of anyone who contacts you out of the blue about your pension.

How to protect yourself: practical checks

These checks are about spotting a scam, not about deciding whether a transfer is right for you.

Before engaging with anyone about your pension

1. Did they contact you first? If so, hang up, delete or ignore it. Cold calls about pensions are banned.
2. Check the FCA Register: visit register.fca.org.uk and search by firm name and registration number. Contact the firm using the details on the Register, not the ones you have been given.
3. Is the investment regulated? Be very wary of overseas property, storage units, forestry, carbon credits and other unusual investments. They are common in scams and often have no protection.
4. Are returns "guaranteed" and unusually high? No legitimate investment can guarantee high returns without risk.
5. Is there time pressure? Legitimate firms give you time to think. Urgency is a manipulation tactic.
6. Are you being asked to keep it secret? A request for secrecy is a fraud indicator.
7. Have you told a family member or trusted friend? Fraudsters rely on isolation. Talking it through often breaks the spell.

Important: Even if a firm is genuinely FCA-authorised, that doesn't mean every investment it suggests is regulated or suitable. Ask whether the investment itself is regulated and what protection applies if it fails.

What legitimate pension transfer advice looks like

Genuine advisers with the pension transfer permission work very differently from fraudsters:

• They do not cold call you about your pension
• They are listed on the FCA Register with matching contact details and the pension transfer permission
• The adviser who checks the advice holds a recognised pension transfer qualification, such as the CII AF7 (or the older G60), the LIBF Level 6 Award in Pension Transfers or the CISI Level 6 pension transfer qualification
• They carry out a thorough fact-find covering your income needs, attitude to risk, health, family circumstances and other assets
• They produce an APTA, a TVC and a written suitability report
• They explain clearly what benefits you would give up, not just what you might gain
• They start from the FCA's assumption that a transfer is unlikely to be suitable for most people
• They explain their charges clearly in writing. Since 1 October 2020, firms cannot use contingent charging for DB transfer advice, except in limited cases of serious ill health or serious financial hardship

2026 context: key pension rules

For anyone thinking about a DB pension in 2026, these are the main rules to be aware of:

• Lifetime Allowance: abolished from 6 April 2024
• Lump Sum Allowance (LSA): £268,275, the usual maximum tax-free cash across all your pensions
• Lump Sum and Death Benefit Allowance (LSDBA): £1,073,100, the limit on tax-free lump sums including certain death benefits
• Normal minimum pension age: currently 55, rising to 57 from 6 April 2028, unless you have a protected pension age
• Inheritance tax: from 6 April 2027, unused pension funds and most death benefits are due to come into the scope of inheritance tax. Check the latest position on gov.uk and with a regulated adviser
• Advice requirement: if your safeguarded benefits are worth more than £30,000, you must take regulated advice before transferring

Getting help and information

If you have been contacted about your pension unexpectedly, don't transfer anything. Check the firm, talk to someone you trust and report the approach.

If you are thinking about a DB transfer for your own reasons, regulated advice from an FCA-authorised adviser with the pension transfer permission is required where your benefits are worth more than £30,000. A legitimate adviser will never pressure you and will start from a position of caution.

I don't give pension transfer advice. I offer a free, no-obligation chat that gives general information about how DB transfers and the advice process work, and if you want regulated advice I can introduce you to an FCA-authorised firm that holds the pension transfer permission. Arthur Browns may receive a fee from the firm we introduce you to if you become their client. Introductions are for transfer values of £50,000 or more; below that, MoneyHelper is a good place to start. You can book a free chat about how the process works.

Free, impartial help is also available from MoneyHelper and Pension Wise. For more on scams, read our guide to pension scams.

Frequently asked questions

Is it illegal to cold call about pensions?

Yes, in most cases. Cold calling about pensions has been banned in the UK since 9 January 2019, under the Privacy and Electronic Communications (Amendment) Regulations 2018. The only exceptions are where you already have a genuine client relationship with the caller or have specifically agreed to be contacted. You can report nuisance calls to the Information Commissioner's Office and suspected scams to Action Fraud.

How do I check if a pension adviser is genuine?

Use the FCA Register. Search by the firm's name and the registration number they give you, check that it holds the pension transfer permission, and contact the firm using the details on the Register. Ask the adviser about their pension transfer qualification.

What should I do if I think I've been targeted by a pension scam?

Do not transfer any pension money. Report the approach to Report Fraud (formerly Action Fraud), the FCA and The Pensions Regulator. If you have already agreed to a transfer, contact your pension scheme and Action Fraud straight away, because acting quickly matters.

Can I get my money back if I've been scammed?

Recovery is very difficult once money has gone to a fraudulent scheme. Some people have received compensation from the Financial Services Compensation Scheme (FSCS) where an FCA-authorised firm gave unsuitable advice. Where the investment is unregulated and overseas and no authorised firm was involved, FSCS protection usually does not apply. Prevention is the most reliable protection.

Is my DB pension at risk if I don't transfer it?

Usually not. Most private sector DB pensions are protected by the Pension Protection Fund (PPF). If your employer becomes insolvent and the scheme cannot pay, the PPF generally pays 100% of the pension for members who have reached the scheme's normal pension age, and 90% for those who have not. You do not need to transfer to protect your DB pension from employer insolvency.

This is a hypothetical, illustrative example. Brian, the firm and the fund are invented, and the figures are examples only. It is not advice and does not describe a real client.