Artificial intelligence is helping fraudsters create more convincing pension scams, making it increasingly important that employees know how to check whether a message or request is legitimate, according to workplace pension provider Penfold.

Reported losses from pension fraud totalled £17.5 million in 2024. The average reported loss was around £34,000, according to The Pensions Regulator, showing the potential risk to people’s long-term financial security. While pension scams are nothing new, advances in artificial intelligence are making them more difficult to recognise. Fraudsters can now use AI to create convincing emails, clone websites and imitate trusted individuals, making traditional warning signs less reliable.

Chris Eastwood, CEO of 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.”

Penfold believes employers can play an important role in helping employees by making pension scam awareness part of their wider financial wellbeing and cyber security communications. They can achieve this through the following steps.

Help employees recognise common warning signs

Regular, practical reminders about pension scams can help employees understand how pension scams work and identify suspicious activity before it leads to financial loss. Employers should encourage employees to pause and verify any unexpected request relating to their pension, particularly when it asks them to:

• Act urgently
• Share personal or security information
• Click an unfamiliar link
• Transfer their pension
• Accept a pension review or investment opportunity they did not request

Rather than relying on the details provided in a message, employees should contact their pension provider using its official website, app or an existing piece of correspondence.

Make it easy to ask questions

Employees should know where to go if they’re unsure about a message, phone call or request relating to their pension.

Creating a clear process for raising concerns with HR or a pension provider can help employees verify information before making important decisions.

Employers can also include pension scams in existing financial wellbeing and cyber awareness programmes. This helps employees understand that fraud is not always easy to recognise and that asking for a second opinion is a sensible precaution.

Work with trusted pension providers

Employers should choose pension providers that follow industry guidance on pension scams, communicate clearly with members and offer strong account security.

Security measures such as multi-factor authentication, secure account verification and timely scam alerts can help reduce the risk of unauthorised access, while clear guidance gives savers greater confidence in recognising legitimate communications.

“Most people only interact with their pension occasionally, which makes it even more important that every communication is clear, trustworthy and easy to verify.

“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,” concluded Eastwood.