A DAD who lost his retirement savings in a fake investment scheme has finally received compensation – and thousands of other victims could also be owed a share of £81.5million.
Stephen Grimes, 59, from Exeter, was persuaded to transfer two frozen pensions worth £27,000 into a fraudulent scheme after being promised a £4,000 cash incentive and higher returns.
Everything appeared genuine: the paperwork, letters, and even the so-called “mid-risk investment option” he chose.
But within months he discovered he’d been conned as part of a scam that tricked hundreds of savers.
Stephen said: “The scam put my family through turmoil, affecting our livelihoods and all our future plans. We had to raid our other pension pots to pay our mortgage.
“I’ve recently had to step back and work less, so receiving the compensation has helped immensely.”
Thanks to a payout from the Fraud Compensation Fund (FCF), Stephen has now been awarded £24,000 and can finally access his pension savings.
Stephen is one of 2,016 victims who have received compensation in the past year after a joint crackdown by The Pensions Regulator (TPR), the FCF, The Pensions Ombudsman and Dalriada Trustees.
Together, the agencies have returned a total of £81.5million to 58 schemes that were hijacked by fraudsters.
More payments are set to follow in 2026 as claims are processed.
The payouts were made possible after a High Court ruling in 2020 confirmed that occupational pension schemes set up by scammers could be eligible for compensation.
Among the cases covered were victims of the Friendly Pensions Ltd scam, which saw crooks Susan Dalton and Alan Barratt jailed in 2022 for their role in a £13.7million fraud.
For Stephen, the nightmare began in 2013 when a scammer cold-called him out of the blue, promising easy money.
He said: “Everything looked so professional. I dealt with an admin team, got booklets and updates and was kept in the loop until the money left my accounts. I thought I was foolproof.”
It was only when TPR intervened that he realised he’d lost his pensions.
The regulator later prosecuted Dalton and Barratt, extraditing them from Spain before jailing them for nearly ten years combined.
Stephen added: “It took 12 years to build up those pensions so losing them was devastating. The compensation has given me and my wife some peace of mind.”
How to check if YOU could be owed cash
Regulators believe more victims could still be eligible for cash but have not yet come forward.
Sara Protheroe, Chief Customer Officer at the FCF, said: “We suspect there may still be members of schemes eligible for compensation who have not yet come forward. We encourage them to get in touch.”
The FCF is urging savers to check its website to see if their pension scheme is being considered. If not listed, victims can contact the fund directly for advice.
Officials warn that prevention is the best defence. Pension savers are still being targeted with bogus cash incentives, fake investment opportunities and offers to access retirement funds early.
Gaucho Rasmussen, from The Pensions Regulator, said: “We know how devastating the impact of pension fraud can be and hope this compensation will help members of the affected schemes to rebuild their lives.
“We and our partners have identified further opportunities to bring compensation to victims of historic scams – and more payments are to follow later this year and in 2026.
“But prevention remains paramount. Compensation is far from guaranteed for all those impacted by suspected fraud, as not all types of pension schemes used by fraudsters meet the eligibility criteria.”
The Pensions Regulator is urging savers to stay on their guard against fraudsters.
“If you are contacted unexpectedly about your pension, you should stop, think and check who you are dealing with,” Gaucho added.
“If you suspect you’ve been scammed, always report to Action Fraud.”
Pensions Ombudsman Dominic Harris said: “I am pleased that we have been able to supply information from our investigations, and work closely with our partners, to help smooth the path to redress through the FCF for the members.
“A lifetime of savings can be stolen in an instant, and I have seen the devastating impact of pensions dishonesty on the members who have brought us their complaints.
“Anyone can be a victim of a scam and the frauds we have investigated have often been extremely sophisticated.
“I would encourage all pension savers to remain alert for pension scams and be cautious of claims of high returns and low risk.”
How to avoid being conned
IF someone contacts you offering a pension review, hang up right away.
Paul Pisano of The Pension Regulator says: “Scams usually begin with unsolicited contact. Be very wary of anyone contacting you that you don’t recognise.”
– IGNORE unexpected pension offers made online, via social media or over the phone. A legit provider will not contact you out of the blue.
-DON’T accept offers to help trace lost pensions. Go to the Government’s official Pension Tracing Service at gov.uk/find-pension-contact-details.
– CHECK who you are dealing with. Search the Finanical Conduct Authority Register at fca.org.uk or call its contact centre on 0800 111 6768 to see if a firm is authorised.
– DON’T let anyone pressure you into making a decision about your pension. Established firms will not give you a short deadline to sign something.
– BEWARE of jargon. Scammers often use phrases like “pension liberation” and “cash advance” to con you into parting with your savings.
– DON’T take pension advice from strangers. If you are over 50, seek trustworthy guidance from the Government’s free Pension Wise service at bit.ly/3O6EaqL. If you want tailored, personal advice, find a regulated financial adviser at vouchedfor.co.uk.
– NEVER click on links to websites and social media ads offering pension advice or an investment opportunity without checking up on them.
– IF you are unsure, contact your pension provider and ask for confirmation that what you are being told is valid.
– SEE the FCA’s ScamSmart website for more guidance on avoiding pension scams.
IF you are worried you may be the target of a scammer, you can report it to the FCA.
If you believe you have been scammed, contact Action Fraud immediately.
You can call on 0300 123 2040 or make a report on its website.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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