The top 5 financial scams in the UK

According to UK Finance figures, criminals successfully stole £1.2 billion through fraud and scams in 2018. And, Citizens Advice say that almost three-quarters of us have been targeted by scammers in the past two years and one in 10 know someone who’s lost money to fraud.

Financial fraud is widespread, and while much of the problem relates to card payments, millions each year are lost to financial, pension and investment scams.

We recently shared an example of where we had thwarted a scam on behalf of a client. So, to help you avoid being defrauded by criminals, here are the top 5 financial scams and how to avoid them.

1. Scams targeting your pension savings

Since Pension Freedoms came into effect in 2015, people entering retirement have enjoyed much greater choice and flexibility regarding their pension savings. However, with added flexibility comes added complexity. And, deciding how to structure your retirement income can be a challenge.

In recent years, scammers have been targeting people over the age of 55 to try and get hold of their pension savings. In the first three years after Pension Freedoms were introduced, Citizens Advice calculated that 8.4 million people had been offered unsolicited pension advice or reviews.

These scammers will typically contact you out of the blue via phone or email, and will generally make claims such as:

  • They are authorised by the Financial Conduct Authority (FCA)
  • They don’t have to be FCA authorised because they aren’t providing the advice themselves
  • They are acting on the behalf of the FCA or the government service Pension Wise.

Under these scams, the fraudsters design attractive offers to persuade you to transfer your pension pot to them (or to release funds from it). Your money is then often invested in unusual and high-risk investments such as overseas property, renewable energy bonds, forestry or storage units. Sometimes it is simply stolen outright.

Look out for someone offering you:

  • A free pension review
  • Guarantees that you’ll get better returns on your pension savings
  • Help to release cash from your pension if you’re under the age of 55
  • Time-limited offers and other high-pressure tactics
  • Unusual investments, which may be unregulated and high risk
  • Complicated investments where it’s not clear where your money will go
  • Long-term investments where it could be several years before you realise something is wrong.

Genuine firms will very rarely cold call you or contact you out of the blue. If in doubt, speak to a qualified financial adviser or check whether a company is registered on the FCA website.

2. ‘Free trial offer’ scams

Companies offering a ‘free trial’ of their product are duping consumers out of millions of pounds a year.

When you sign up for a free trial, you will typically enter your card details. While you are told you won’t pay for the introductory period, you are often signing up to an expensive monthly subscription that is very difficult to get out of. Once this type of billing is approved – known as ‘continuous payment authorisation’ – money can be taken without any further contact.

Always double-check the terms and conditions of any offer before signing up. And, be careful about handing over card details online if you’re not sure.

3. Investment and ‘boiler room’ scams

The so-called ‘boiler room’ scam promises an investor an impressive return but delivers nothing but a loss.

Typically, you will receive a call or email out of the blue offering you an investment opportunity with excellent returns. There will often be a ‘time-limited’ factor, pressuring you into acting quickly.

It is common for victims to part with tens of thousands of pounds and, as the Financial Conduct Authority (FCA) doesn’t authorise boiler rooms, it is often the last an investor will see of their savings.

Always check the FCA status of any firm you intend to deal with on the FCA register or call 0800 1116768.

4. Phishing and smishing

Phishing (using email) and smishing (using text messages) are two of the most common types of scam. Fraudsters pose as a legitimate organisation (your bank, HMRC etc.) and ask you to click a link to verify your account and password details.

If you fall for the trick, the scammer can read the information you type in, giving them access to your account. And, if you lose money this way, you won’t get it back.

Look out for any suspicious-looking email addresses and email attachments and don’t open anything you’re not sure about.

Your bank or building society will never ask you to disclose full security and password details, and so if you are asked to provide these always check first. Call your bank and ask them if they have tried to contact you.

5. Safe account scams

Related to the phishing and smishing scams above, a ‘safe account’ scam occurs where you are contacted (usually on the phone) by someone purporting to be from your bank.

They will say that your account has been compromised and that you should transfer all your money into a ‘safe account’.

While you may be concerned that your money is at risk, remember that a bank or building society will never ask you to transfer funds into a ‘safe account’. If your account has been compromised, your bank can stop money being taken from it very quickly so there is no need to transfer your money to a different account.

Get in touch

Although these are the top 5 financial scams in the UK, there are lots of other ways the swindlers can defraud you out of your savings.

If you have been contacted regarding a pension or investment opportunity, and you have any doubts, please get in touch with us. We can act as your first line of defence and establish whether it is a scam or not. Contact us by email at or call us on 01189 876655.