Trustees have key role in pension fraud prevention as £48,000 lost every day
New Action Fraud data show UK savers lost £17.57m to pension fraud in 2024, roughly £48,000 every day, with an average loss of £33,848 per victim. RSM UK warns pension savers are being targeted at their most vulnerable moment, when accessing their pension pot or taking lump sum drawdowns, as criminals escalate social engineering tactics driven by generative AI.
Ian Bell, Partner and Head of Pensions at RSM UK said: “Pension fraud is likely to increase in the run up to the budget, as speculation continues that the Chancellor may change tax rules on the tax-free treatment of pension lump sums. The point of drawdown is a prime hunting ground for scammers. Since pension freedoms gave people more flexibility, and with cost-of-living pressures driving lump-sum withdrawals up by 60%, fraudsters have adapted fast. They blend high-pressure investment pitches with convincing impersonations of trusted advisers, often using AI deepfakes to make voices and video appear authentic.
“Criminals are pressuring victims with ‘can’t miss’ investment pitches, or simply pretending to be the member to take over accounts. They are now supercharging those old tactics with AI generated deepfake voices and video, making interactions feel authentic at speed. Alongside this, we are continuing to see vishing calls, despite new blocks on spoofed numbers, and a crackdown on clone firms and websites that mimic the branding of legitimate advisers, regulators and compensation bodies.
“Illegal early access offers promising cash before age 55 continue to circulate, often leading to tax penalties and even total loss of funds. At the same time, fraudsters are increasingly hacking email accounts and using stolen data to impersonate members, change beneficiary details or even create fake pension accounts, creating a perfect storm for anyone accessing their pension.
“Trustees and administrators have a key role to play in embedding the Pensions Regulator’s scam controls into touchpoints with clients, from wake up packs, through transfer triage and applying red/amber flags consistently. These controls need to be tested and revisited to ensure that they remain fit for purpose as threats evolve. Front-line teams must also be prepared for AI-enabled impersonation to combat fraud threats and spot red flags at the earliest stage.”
“We’d advise anyone who’s about to take out a pension lump sum to slow down, independently verify the offer is legitimate, and treat any unsolicited contact as hostile until proven otherwise. In a world of deepfakes, don’t treat a voice as proof.”