A new campaign to tackle pension scams launches today as the latest figures reveal that victims of pension scammers lost an average of £91,000 each in 2017.
The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) have joined forces to urge the public to be on their guard when receiving unexpected offers about their pension and to check who they are dealing with. The two regulators have launched a new ScamSmart advertising campaign targeting pension holders aged 45-65, the group most at risk of pension scams. This comes as a new poll commissioned by the regulators reveals that almost a third (32%) of pension holders aged 45 to 65 would not know how to check whether they are speaking with a legitimate pensions adviser or provider.
Highly sophisticated scammers lure people into transferring their pensions into fraudulent schemes, stealing an average of £91,000 per victim. Victims of pension scams can lose their life savings, and be left facing retirement with limited income.
The FCA and TPR are calling the public’s attention to the tactics used by pensions scammers. One of the most common tactics is to offer a ‘free pension review’. Research reveals that one in eight 45-65-year-olds surveyed (12%) said they would trust an offer of a ‘free pension review’ from someone claiming to be a pension advisor.
Cold calling is currently by far the most common method used to initiate pension fraud. Other scam tactics include:
- Unexpected contact about your pension via phone, post or email
- Promises of guaranteed high returns and downplaying the risks
- Offering unusual or overseas investments that aren’t regulated by the FCA e.g. overseas hotels, forestry, green energy schemes
- Putting people under pressure to make a quick decision, for example with time limited offers, and sending a courier round with paperwork to sign
- Claiming to be able to unlock money from an individual’s pension (which is normally only possible from age 55)