How to avoid pension fraud

Pension fraud is still very common; in 2024, about £48,000 will be lost every day

These are the primary ploys to be aware of.

As fraudsters continue to target the elderly, hundreds of people lost their retirement funds last year, and an estimated 48,000 people lost their money every day in 2024.

According to recent data from Action Fraud, there were 519 reports of pension fraud in 2024, with a startling 17,567,249 stolen from pension savers last year.

The average loss for each victim is 33,848; however, some victims will have suffered greater losses than others.

The Pensions Regulator's executive director of regulatory compliance, Gaucho Rasmussen, stated: "These figures are yet another concerning wake-up call, exposing the startling truth of how much money is taken from diligent savers in a single year.

Using impersonation schemes and fraudulent investment deals, fraudsters are merciless in their attempts to take advantage of weaknesses and seize the hard-earned pensions of others. Since their future depends on their pension, we implore all savers to pause, consider, and make sure they are protecting it.

Pension scams cost millions of pounds, but that is a small portion of the 1 point 17 billion that scammers took from 3 point 31 million customers in 2024.

You should try to protect yourself and your pension from scammers because, regrettably, victims of these schemes will have a very hard time getting their money back.

We examine common fraud schemes that pension savers may encounter and how to prevent them.

Which pension scams are most prevalent.

Action Frauds' analysis found that impersonation and pressure tactics used in investment scams were the two most common ways that criminals targeted victims.

Investment fraud.

Scammers who persuade victims to invest in schemes or products that are either worthless or nonexistent are said to be engaging in investment fraud. Once the victim has sent the scammer their money, they will likely cease all communication with the victim.

The fraudster will frequently use pressure tactics in this kind of scam to try to get the victim to send over their money right away. In an attempt to pressure the victim into "investing" right away, they might emphasize how urgent the investment opportunity is.

Although other means of communication may be tried, scammers typically contact victims via phone. AI deepfakes, which mimic well-known financial and business figures, are another tactic used by scammers to trick people.

"It is a sign of fraud when you feel pressured into an investment opportunity on the spot; legitimate organizations will never make you feel this way," stated Chief Superintendent Amanda Wolf, head of Action Fraud. Be cautious when considering any investment offer, and if you're not sure, get independent financial advice.

Account takeovers.

When a scammer takes over your bank, credit card, email, or pension account, they can use this access to steal your money. This is known as an account takeover.

In addition to using impersonation or other social engineering techniques to obtain passwords, scammers may claim that a victim's account needs to be taken over because their computer was infected with a virus that mined the account information.

Additionally, Wolf advises: "Avoid unsolicited pension-related phone calls as they may be from criminals attempting to obtain personal information in order to pose as you, obtain access to your pension scheme account, and ultimately steal your hard-earned money.

Although there are other ways to defraud pensioners, the two methods mentioned above were the most prevalent in 2024.

How to try to prevent pension fraud and protect yourself.

Make sure you have taken precautions to lessen the possibility that scammers will steal your pension fund.

Action Fraud recommends pension savers secure their online pension accounts by using a unique and strong password and enabling two-factor verification for an extra level of security.

Although this will help prevent account takeovers, strong passwords won't help prevent investment scams, in which scammers use social engineering to trick people into sending money.

Action Fraud warns pension savers that possible investment opportunities could be fraudulent, so they should always pause and think before considering them.

Pension savers should not be hurried into investing, and reputable companies will never press you to make an immediate investment.

Three indicators that something might be investment fraud are listed by Action Fraud.

When there is pressure to invest, the risk of losing money is minimized, and promises of returns that seem too good to be true are made.