Pension and investment scams are on the rise and becoming increasingly sophisticated. According to the 2024 Crime Survey for England and Wales, 1 in 16 adults were victims of fraud.

Fraudsters use manipulative tactics to exploit us and lower our defences so anyone can be at risk, no matter your age, knowledge or experience. The emergence of artificial intelligence (AI) enables scammers to create even more convincing frauds, making it harder than ever to spot the warning signs.

Criminals may use fake websites, emails, and social media profiles to lure victims. Phishing emails may look genuine, use official logos and language to trick you into clicking malicious links or providing sensitive information. Cyber criminals may also hack into your accounts or intercept communications to steal your identity or funds.

Understanding the risks and knowing how to spot the warning signs can help you safeguard your hard-earned savings and investments.

So, how can you protect yourself? Here are some simple tips:

• Use strong passwords and multi-factor authentication for financial accounts, email and social media.
• Enable automatic updates for operating systems, browsers and banking apps to fix security vulnerabilities.
• Avoid using public wi-fi for financial transactions and enable biometric security features on financial apps.
• Check your bank and credit card transactions for unexpected transactions on a regular basis.
• Be cautious with emails or texts asking you to click links or download files, even if they look genuine. If unsure, you can report it to the Suspicious Email Reporting Service: report@phishing.gov.uk
• Never share personal or financial details over the telephone unless you are certain of the person’s identity. If in doubt, hang up and call the company back using their official number.
• Don’t let anyone rush you. Scammers want you to act before you have time to think. Take your time, do your homework, and talk to someone you trust.
• Always check if a company or adviser is authorised by the Financial Conduct Authority (FCA). You can check this on the FCA register: https://register.fca.org.uk/

Tax scams

Tax scams are also on the rise, with fraudsters posing as HMRC officials and making threatening calls about unpaid taxes or promising tax refunds. Remember, HMRC will never ask for your bank details or demand payment over the phone or by email.

Pension fraud

Pension fraud remains a significant threat. In 2024, losses from pension fraud totalled £17.5 million, with an average loss of approximately £34,000 per individual. These scams can severely affect victims’ financial security and retirement plans.

Be wary of anyone who contacts you out of the blue about your pension. Unsolicited, cold calling about pensions has been banned in the UK since 2019 to help combat financial crime and protect retirement savings.

Scammers are often convincingly professional, with credible websites, testimonials and may persuade savers to transfer overseas or release their pension funds (pension liberation). Unfortunately, recovering lost money is difficult, you may not receive any compensation, and could end up with unexpected taxes for taking unauthorised pension withdrawals.

Expert advice

When it comes to accessing your pension, taking professional advice is essential. Our financial planning team at EQ Investors can guide your through your options and provide you with specialist advice.

Pension Wise is a free government-backed service from MoneyHelper that offers appointments to people aged 50 or over, however large or small their pension pot.

How can I report financial fraud?

If you think you have been targeted by a scam, report to Report Fraud – the national fraud and cybercrime reporting centre or call 0300 123 2040. In Scotland report to Police Scotland calling 101.

Staying vigilant and informed is your best defence. Always trust your instincts, if something feels wrong or too good to be true, it probably is.

Please remember, this content is provided for information purposes only. Investment involves risk. Past performance is not a guarantee or indication of future results. Investment return and the principal value of an investment may go up or down and may result in the loss of the amount originally invested. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.