The latest figures from Action Fraud reveal that £48,000 a day was lost to pension scams in 2024. That amounts to more than £17.5 million in pension savings now in the hands of criminals.
UK Finance, meanwhile, has released its annual fraud report and confirmed that, overall, a massive £1.17 billion was stolen in 2024.
On top of the above figure, the industry prevented a further £1.45 billion of fraud over the same period.
Criminals have always evolved their tactics, finding new ways to part you from your hard-earned money. However, the rise of AI has undoubtedly provided scammers with new opportunities.
AI has:
- Increased the sophistication of scams, making them harder to spot
- Allowed criminals to scale up their operations while cutting costs
- Forced the industry to keep up, remaining vigilant for new scam types.
Keep reading for a look at ever-changing scammer tactics and the red flags that can help keep your money safe.
UK Finance’s 2025 Annual Fraud Report confirms that the number of scams is rising
Fraud figures confirm that while total scam losses in 2024 remained broadly unchanged compared to 2023, overall incidents increased.
Confirmed fraud cases topped 3.3 million in 2024, a 12% rise from the previous year.
Thanks, in part, to the industry’s efforts to identify and prevent fraud, scammers are having to work harder to achieve the same gains. And their tactics are changing.
UK Finance broadly breaks scams down into two types:
- Unauthorised fraud, which involves a third party gaining access to your accounts and money without your say-so.
- Authorised fraud, which involves scammers tricking you, as the account holder, into sending money to a third party that purports to be a genuine payee.
Authorised fraud cases and monetary losses both fell in 2024, likely due to intervention from the banking and finance industry. Predictably, this led to a rise in fraud elsewhere, namely in unauthorised fraud.
Scammers are using AI and going to ever-greater lengths to commit fraud
It used to be relatively easy to spot a fraudulent email – if you knew the signs. Poor spelling, clunky grammar, and simplistic attempts to match a company’s logo or branding meant that scam messages stood out.
In 2025, though, scammers can use generative AI and large language models to make their fraudulent contact look much more convincing. This means more vigilance is required.
Last summer, we wrote about the worrying rise of “Hi Mum” scams and how to avoid falling victim. This impersonation scam uses WhatsApp or other platforms to send messages purporting to be from your child. AI can help to make these messages seem genuine. Scammers can even use samples of your child’s voice – often readily available on their social media – to imitate your loved one.
More recently, the National Fraud Helpline spoke about a scam (later reported by the Guardian) that was “one of the most sophisticated and convincing” they had ever seen.
In this scam, the fraudsters tricked victims into setting up a live account with a genuine pension firm, allowing them to gain immediate access to personal information, including passwords and answers to two-factor authentication questions. Once the consumer began to transfer money in, the fraudster simply redirected the money into their own account.
What made the scam so convincing was the online ads, which appeared genuine, the use of a real (and regulated) firm, and the fact that the rate offered was only slightly better than the rates available elsewhere. The scammers were also fluent English speakers.
Transferring your retirement fund into this new account could have seen you lose it all, so it’s vital you know the red flags to look out for.
3 pension scam red flags to look out for now
1. Contact out of the blue
Pension cold-calling has been banned in the UK since 2019. While the ban might not stop a scammer from contacting you, if you receive an unsolicited call about your pension, it is a scam, so hang up immediately.
The same is true of emails or text messages, however genuine they might appear, so don’t reply or click any links.
If you are unsure, check the firm claiming to be in contact with you on the FCA Register and try ringing them on a number you find for yourself.
2. Offers to access your pension early
The minimum retirement age in the UK is currently 55, rising to 57 in 2028. It isn’t usually possible to access funds before this date, unless you have a special occupation or ill health.
Accessing funds before the minimum age on any other grounds will be classed as an unauthorised payment with strict HMRC penalties. You could be liable for an unauthorised payment charge, as well as a surcharge, which could amount to 55% of the amount you are due to receive.
This will be on top of any money you’ve already lost to scammers by transferring your pension to them. The FCA’s ScamSmart page has more information about pension liberation and the other retirement scams to look out for.
3. “Guaranteed” returns or time-sensitive offers
A simple rule of thumb for any aspect of your finances is that if an offer looks too good to be true, it probably is. Pension investment carries a level of risk, and there are no guarantees where stock markets are concerned.
In an attempt to make you overlook this, scammers might add time pressure by advertising once-in-a-lifetime offers or attractive rates with fast-approaching expiry dates. These are only designed to panic you into poor decision-making, so always take a step back and think before making important financial decisions.
Get in touch
With £17.5 million lost to pension fraud last year, vigilance is incredibly important. Contact us before making any important retirement decisions, and we can help to keep your money safe.
If you’re looking for an independent financial adviser in Milton Keynes or Olney, look no further. At Jane Smith Financial Planning, we’ve been helping clients for 30 years, so contact us at info@janesmithfinancial.com or call 01234 713131 to see what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Production