Are you being (pension) scammed?

Last year, financial fraud and scam complaints hit their highest level ever, according to the Financial Ombudsman¹. The statistics surrounding pension scams are particularly chilling.

According to ActionFraud, the UK’s national reporting centre for cybercrime and fraud, an estimated £17.7 million of pension funds was fraudulently accessed between 2023 and 2024.² The average loss per person was almost £47,000. However, The Pensions Regulator reports that fewer than one in five victims report the crime.³

The statistics are an alarming wake-up call, according to Gaucho Rasmussen, Executive Director of Regulatory Compliance at The Pensions Regulator. “Fraudsters are ruthless, using fake investment deals and impersonation scams or ‘cloning’ to exploit vulnerabilities. We urge every saver to ‘stop, think and check’ to protect their pension as if their future depends on it - because it does.”

Why pension scams are on the rise

Last year’s Autumn Budget announced unexpected changes around inheritance tax (IHT) and unspent pension funds. Since then, many savers have reassessed their retirement income plans, or considered accessing their tax-free lump sums early.

A saver who is already considering moving funds outside the tax-advantageous shelter of a pension could represent a golden opportunity for a scammer. Pension providers offer protection from scams, but once money is withdrawn, individuals may be more at risk.

How to spot a pension scam

Scammers may look or sound exceptionally convincing; their websites appear professional, and they can sound highly credible on the phone, or in emails. The Investment 
Association (IA) recently warned that cloning is now the leading source of financial fraud investors face.4 These fake identities may be used to impersonate genuine investment managers, or individuals in order to make withdrawals or transfers of pension funds.

A scammer may offer higher or guaranteed returns on pension investments, or a way to unlock a pension before the age of 55. But their sole aim is to part people from their money.

Five ‘red flags’ to look out for:

• Receiving an unexpected email, text or social media message offering a ‘free pension review’ or ‘guaranteed returns’. 
  These phrases, or words such as ‘pension liberation’ or ‘pension loophole’ should all ring warning bells.
• Receiving any unsolicited call regarding a pension

Pension cold calling is illegal in the UK. If you receive a call from an unknown number about your pension, it could be a scam. Hang up, block the number and report it to the Information Commissioner’s Office so it can take action. 

• An offer, followed quickly by a request to share personal details.

Never share any personal or pension information or account details with a third party. Neither St. James’s Place nor any bank will ever request such information over the phone. If you have a gut instinct that something isn’t right, hang up and report the call.

• Any pressure to act fast.

Scammers know that putting someone under pressure can panic them into agreeing to a payment. Tactics include false deadlines to secure the ‘offer’, repeated calls or contact, and even couriers calling at your home to collect signed documents. Never make a decision on the spot, always ask advice from a qualified source you trust, such as your financial adviser.

• Any recommendation to transfer a pension to a single investment fund.
  Pressure to transfer pension funds into a single investment, especially if accompanied by a deal sweetener such as a cash back payment or a transfer bonus, is a red flag.

Protecting your pension

• Check the FCA Register to make sure that anyone offering you pension advice is authorised by the FCA, and that their details match those on the Register. If they’re hard to contact, or only appear to have a PO box, do not proceed.   
• Use three random words to create a unique password for your pension account and enable 2-step verification (2SV). Make sure your anti-virus software is up to date, and run it regularly.
• Check bank accounts weekly for any transactions you don’t recognise.

What to do if you think you might have been targeted

Firstly, don’t panic, but don’t delay.  If you have handed over any money, speak to your bank and pension provider immediately so they can block the transaction or help prevent further withdrawals. You should also report what’s happened to your financial adviser and to Action Fraud at actionfraud.police.uk or by calling 0300 123 2040.

The best way to spot and block a scammer is to make sure you and your Partner know the red flags, how to protect your accounts and how to report a suspicious contact, or a crime.
How SJP is protecting your financial security

St. James’s Place is committed to safeguarding your money, personal information and privacy, and has robust security measures in place to help prevent fraud and cybercrime.

If you discover that you have been targeted by cybercriminals, St. James’s Place advisers are immediately available with practical advice on how to get your personal or business finances back on track. If you would like more information about online security or cyberfraud, please visit www.getsafeonline.org, www.actionfraud.police.uk 
and www.cyberstreetwise.com.

Sources

¹The Financial Ombudsman, September 2024
²ActionFraud, October 2024 
³The Pensions Regulator, March 2025
⁴The Investment Association, March 2025

The United Kingdom has recently experienced an increase in cloning fraud targeting the financial services sector. This underscores the critical importance of verifying that any communications you receive originate from a bona fide organisation.

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