Finance expert Laura Pomfret said people need to be wary of five key phrases
BBC Morning Live finance expert Laura Pomfret said people are being scammed out of pensions(Image: BBC)
A BBC specialist has issued a stark £34,000 warning to pensioners – cautioning ‘It can be gone forever’. Speaking on BBC Morning Live, finance expert Laura Pomfret urged people to remain vigilant for certain phrases used by scammers attempting to defraud them.
Fresh data from Report Fraud reveals that approximately £48,000 is lost to pension scams daily, with victims losing an average of £34,000. Ms Pomfret explained: “It is their life savings. It’s their retirement plan, and it could be absolutely devastating to an individual, to a family if this happens. And pensions are attractive to scammers because people-not only is it large amounts of money, obviously-but people don’t actively keep an eye on them. You know, you get a paper through the post once in a whilst; you’re not constantly watching it. And so things can be happening when you’re not quite aware.
“And latest figures from Report Fraud from 2024 recorded 519 pension fraud reports, which may sound small, but that equated to over £17.5 million lost to pension fraud-that’s just in 2024. That’s roughly £34,000 per person targeted, so you can see why it’s such a lucrative fraud for fraudsters to kind of do. And the harm isn’t just then about the money, it’s the consequences that many victims are nearing retirement-you know, they don’t have a long time to suddenly, you know, make that money back again. It can be gone forever.”
There are two primary methods fraudsters use to access someone’s pensions. Report Fraud explained one is impersonation fraud, where criminals pretend to be the victim using personal data and attempt to access the pension pot directly.
Ms Pomfret added: “And so the big thing there is trying to protect our personal data where possible, making sure passwords are protected, and that your identifiable information is kept private so that no one else can kind of impersonate you and access your pension pot.”
The second method involves investment scams, where fraudsters create advertisements, brochures and websites to persuade victims to transfer some or all of their pension to them.
Ms Pomfret explained: “We’re all online now of all ages, and so it’s very easy to be targeted very quickly through an ad that looks genuine. Your money is then often put into high-risk schemes such as overseas property or energy schemes, or it’s not put anywhere at all-it’s literally stolen from you and put into the pockets of scammers.
“Three men were convicted of this, actually, and over 3,000 people were persuaded to invest into this “ethical forestry scheme. ” £70 million was stolen overall, and whilst victims are waiting for long-term returns in an ethical investment, the fraudsters spent the money on fancy homes and cars and they disappeared off into the distance.”
According to the expert, ‘pension liberation fraud’ occurs when scammers attempt to access someone’s pension before they reach pension age.
She explained: “They want the pension funds early and make some form of investment with them. Again, this was another headline that we saw: two men were found guilty of a fraudulent liberation scheme where £3.7 million was taken from dozens of vulnerable people’s pensions. And this shows that pension fraud can happen at any age, not just as you’re approaching that retirement number.”
She urged people to be vigilant for several ‘warning signs’: “The first one is the fact that if this is unsolicited contact-if someone contacts you out of the blue, as we said online-if it’s out of the blue, it isn’t for you. It should immediately raise concern because there isn’t a need for people to proactively contact you about your pension, about investments. Again, it should be normal contact, regular statements. Can you go log in? Can you go speak to your provider? If someone’s contacting you out of the blue, that is a bit of a red flag. So look out for those unexpected methods of contact.”
Language is equally crucial, she noted, and individuals should watch for five key phrases: “But if you have been approached, think about the language that they are using in this-I guess it’s a bit of a sales tactic. Things like: are they saying ‘pension liberation,’ ‘early access,’ ‘unlock your pension,’ ‘limited time offer,’ ‘low risk, high reward’? These phrases should trigger something in you that should make you feel a bit uneasy because this promise of exceptional profits should be ringing alarm bells. Big returns are a warning sign. Investing’s boring-I hate to admit it, but it really is. It’s slow, it’s monotonous, it’s over time, it’s not like the movies. And so if something sounds too good to be true, or it makes you feel a bit uncomfortable, it probably is.
“And they will use also pressure tactics, so watch out for ‘you can only do this now,’ ‘this investment is closing,’ ‘you don’t need to take independent advice, they won’t know what this scheme is, come with us and do this scheme.’ Anything like that that makes you feel a bit uneasy when it comes to pensions, you should be staying away from.”
If individuals are uncertain, they can verify the Financial Conduct Authority (FCA) register to confirm whether the firm is legitimate – and ensure the contact details match as well, in case someone is impersonating the company.
She continued: “If you think you have fallen victim to this and you maybe are in the process of transferring your pension to somewhere that you feel a bit uneasy about-contact your existing pension provider immediately. They may well be able to stop this because pensions are slow-these companies do not move quickly like the existing legitimate companies. They may be able to stop the transfer of funds and may just be able to help you out. But the important thing about all this is: it is normal to be targeted approaching pension age, there are ads everywhere. Be aware and make sure that, you know, you don’t put your life savings at risk.”
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