Criminals’ use of artificial intelligence (AI) is making it harder for people to determine whether communications are legitimate – meaning employers need to do more to help their staff avoid pension scams.
Pension provider Penfold has warned that traditional warning signs such as poor spelling or suspicious-looking communications were becoming less reliable as scam techniques improve.
UK savers lost £17.6m to pension fraud in 2024, according to Action Fraud data previously highlighted by the Pensions Regulator (TPR), with an average loss of £33,848 per victim.
Chris Eastwood, CEO at Penfold, said: “For years, people have been told to look out for poor spelling, unfamiliar email addresses or suspicious phone calls. AI is changing that. While those checks are still very important, a scam can now look much more polished and convincing.
“The most important warning signs are often in what someone is asking you to do. Unexpected contact, pressure to act quickly, requests for personal information and promises that sound too good to be true should all give people a reason to stop and check.”
The role of employers
Penfold said employers could help by regularly reminding staff about common scam tactics and encouraging them to verify unexpected requests directly with their pension provider rather than relying on contact details contained in a message.
It also called on employers to establish clear routes for employees to raise concerns with HR or their provider and to include pension fraud in existing financial wellbeing and cyber awareness programmes.
The warning comes amid wider concern across the pensions industry about AI-enabled fraud. TPR and the Pension Scams Action Group have used machine learning to identify potentially fraudulent websites, while the Financial Conduct Authority’s recent Mills Review identified the amplification of fraud and cyber risks as one of four major shifts likely to accompany wider AI adoption in financial services.
Last year, TPR also urged trustees and administrators to strengthen member verification and account security and prepare front-line teams to identify AI-enabled impersonation.
Eastwood said: “Protecting pension savings is a shared responsibility. Providers need strong security, employers can help raise awareness, and employees should feel confident taking a moment to question any unexpected request. A simple conversation or quick verification could prevent someone from losing their retirement savings to a scam.”
