Why you might be vulnerable to scams in retirement and how we can help

In the spring of 2024, BBC North presenter Peter Levy fell victim to a financial scam that saw half his life savings disappear in minutes.

Whilst Levy has thankfully received the full sum back, this experience shook him. Speaking to the BBC, he says, “The scammer had my name, he knew the bank I used, and he had my phone number. They said there was unusual activity on my account and that I needed to log in. They told me to download an app and the whole time, they were stealing from me.”

He continues, “He was so convincing. I fell for it hook, line, and sinker. I feel embarrassed and ashamed – even stupid that I went along with it.”

Sadly, scams like these are all too common, and falling for one is nothing to be ashamed of. In fact, UK Finance reports that in 2023, fraudsters stole nearly £1.3 billion from UK consumers across almost 3 million cases.

What’s more, if you are approaching or already in retirement, you could be particularly vulnerable to financial crime that may have a serious effect on your wealth and wellbeing.

Keep reading to discover why, and how we might be able to help.

Pension scams are all too common and could be of huge detriment to your financial stability

Your pension is likely to be one of the most valuable assets to your name, aside from your home, and could be set to play an integral role in your retirement plans.

Worryingly, research from LV=, published by PensionsAge, reveals that 1 in 7 adults has been targeted by a pension scam in the last 12 months.

A pension scam can be described as one or a combination of:

• An attractive investment offer that promises higher returns than your pension currently achieves
• The ability to access your pension funds early (as of the 2024/25 tax year, you can access your pension from age 55)
• An offer to consolidate your pension pots “quickly” with “no strings attached” and “maximum returns”.

If you’re approaching retirement and starting to think about gaining more from your pension, you could be more likely to fall for these fraudulent offers. The most important tips to remember regarding pension scams are:

• Legitimate providers will almost never contact you unsolicited with “offers”
• Promises of certain returns are almost always too good to be true
• Anyone who pressures you into a transfer or says that the “offer is expiring soon” is likely to be lying.

If you’re looking for opportunities to increase returns on your pension investments, it may be wiser and safer to consult your Financial Planner first.

A comprehensive, impartial review of your circumstances could help you complete any transfers or opt for consolidation, if you wish, in the safe hands of an expert who has your best interests at heart.

An increasingly digitised world could leave you vulnerable to impersonation scams

As reported by the Guardian in May 2024, the UK has seen more than 6,000 bank branch closures in nine years. Sadly, the report reveals that 33 constituencies in the UK will no longer have a single bank branch open by the end of the year.

Whilst the digitisation of finance has provided countless wealth building opportunities for consumers of all ages, it can pose a risk to those who find the world of technology difficult to navigate.

This is especially true with regards to impersonation scams. These involve a scammer posing as either a trusted organisation, such as HMRC, or even a loved one, preying on trusting individuals who are none the wiser.

For example, scammers could:

• Use WhatsApp or Facebook messenger to contact you, pretending to be someone you know who needs financial help. TSB reports that Meta-owned platforms, including WhatsApp, Facebook and Instagram, played host to 86% of impersonation fraud cases in 2022.
• Send emails with false marketing that looks identical to that of a trusted organisation. These may include HMRC, the NHS, or your bank, building society, or pension provider, asking for your details or even saying you’ve been offered a refund on payments you’ve previously made.

Much like BBC presenter Peter Levy, if you have fallen for an impersonation scam, you might feel “ashamed” – but these are convincing individuals who use professional tactics to dupe consumers. It can feel overwhelming and shocking if you realise a criminal has convinced you to send money to a “loved one in need” – especially if this money was a large portion of your hard-earned retirement fund.

Your bank, building society, pension provider, or investment platform may have anti-scam measures in place

Fortunately, there are an increasing number of protective measures in place to warn consumers of scam activity.

You might have noticed that your online banking app has implemented “two-factor authentication” and scam warnings before you click “send” on bank transfers. Similarly, your pension or ISA providers may have fraud warnings on their site or apps, and if so, it may help to read these closely and follow their specifications to stay safe.

What’s more, it could be especially important to use different passwords for each account you hold online. You could use a “password bank” attachment on your internet browser that stores your different passwords in an encrypted folder, meaning you don’t need to remember each and every different password, while protecting your money from the advances of hackers and scammers.

Even with these measures in place, though, it’s easy to be caught out. If you feel you have fallen for a scam and have parted ways with money, report this straight away. You could speak to Action Fraud, call the police, or if you are a client here at PenLife, contact your Financial Planner who might be able to guide you further.

Working with a Financial Planner could help to protect you and your loved ones from fraud

Ultimately, having a close relationship with a Financial Planner could help to you stay safe from scammers.

We’re here to provide guidance on important financial decisions, such as:

• Gifting large amounts of money to family members
• Transferring or withdrawing from your pension
• Seeking a tax rebate from HMRC
• Making high-risk or overseas investments.

So, before you act on any of the above, consulting your Financial Planner could help to ensure you’re doing so safely and out of reach from financial criminals. If you have already parted ways with money, we can offer reassurance and help you to contact the relevant authorities in an effort to retrieve the funds.

To learn more about how financial planning could help shield your wealth from fraud, or to chat about becoming a client, email us at enquiries@pen-life.co.uk, or call 01904 661140.

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.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

All information is correct at the time of writing and is subject to change in the future.