As part of this year’s Scam Awareness campaign by Citizens Advice, WEALTH at work is urging individuals to take proactive steps to protect their retirement savings.
Figures from Action Fraud highlights the scale of the issue. In 2024 there were 519 reports of pension fraud in total and £17,567,249 lost, with an average loss of £33,848 per person. Research suggests the two most prevalent ways criminals target victims were investment fraud pressuring tactics, and account takeovers of a victim’s pension scheme by impersonating them.
Here are some key considerations to help people remain alert and avoid losing their pension to scams and fraudsters.
Scams don’t look like scams – Fraudsters often look and sound legitimate by having professionally designed websites and literature that mimic a genuine business, which is why it is easy to be deceived.
If it’s too good to be true, it probably is – If an investment offers the opportunity of a lifetime, it’s likely to be a scam and there is little that can be done for those who fall for it. High-return offers should always be approached with caution and their legitimacy verified before taking any action.
Scammers will do their homework – Fraudsters often go to great lengths to appear trustworthy. Those who run pension scams are clever and may have been able to get hold of someone’s personal details; not just about them, but their local area and interests. The familiarity can make their approach seems genuine. People need to be aware to avoid letting scammers’ knowledge and friendliness catch them off guard.
The right decision takes time – Genuine advisers will never rush anyone to make a decision. Anything that is advertised as a limited time offer is likely to be a scam.
Understand the basic facts first – Pensions can normally only be accessed at the age of 55, with the exception of seriously ill health. In normal circumstances, if a company promises to release pensions early, they are lying and it is a scam.
Know where to go for help – People should approach any pensions or investing offer with caution and always check that the company is registered with the Financial Conduct Authority (FCA) before committing to anything https://register.fca.org.uk/.The FCA’s ScamSmart website also includes a warning list of companies for individuals to be aware of www.scamsmart.fca.org.uk. It may also be a good idea for people to seek investment advice if they’re unsure.
Protecting privacy – Scammers will use technology and try to contact individuals through various means such as social media, texts, telephone calls and emails. If anyone is in doubt, they should ignore it and hang up the phone or delete the message. Phone companies should be able to help by blocking any offending numbers and email providers with blocking emails from specific senders. Be aware of what is shared through social media and check that privacy settings are as secure as possible.
Watch out for buzzwords – Common signs of pension scams include phrases like ‘pension liberation’, ‘loan’, ‘loophole’, ‘savings advance’, ‘one-off investment’, ‘cashback’.
Help stop the scams – In England, Northern Ireland and Wales pensions fraud or concerns about a potential scam should be reported to Action Fraud. For those that live in Scotland, they should call Police Scotland or Advice Direct Scotland. People should also report unauthorised financial advice and transfer concerns to the Financial Conduct Authority and breaches of pensions law to The Pensions Regulator.
Jonathan Watts-Lay, Director, WEALTH at work comments; “Economic uncertainty and cost-of-living pressures make people more vulnerable to pension scams. Often the reason that people get scammed is because they are offered amazing returns, something that they believe they can’t get anywhere else. It’s crucial to stay alert to the tactics of criminals targeting pension savings and remember that scams don’t look like scams, and can be difficult to spot. Always approach any investing offer with caution and check out the company with the FCA first.”
He adds; “Employers play a key role in ensuring that pension scheme members make informed choices concerning their pensions. Many provide services in the workplace such as financial education and guidance to help people understand their options and what red flags to look out for, as well as access to investment advice. Speak to your workplace to see what support they provide.”