FCA study reveals rising pension fraud risks

"60% of those that have experienced investment fraud have not reported it, so the problem could be greater than we know."

The FCA believe that the current low interest rate environment is one of the key reasons over 55s are considering investing in risky or unfamiliar investment products. 41% have recently moved money out of savings into investments, and 40% said they have seen a sharp rise in unsolicited investment calls.

Of those questioned, 26% chose to invest in unregulated investment products and 23% say they are considering investing in unfamiliar types of investments in the future. Over a quarter of those who have fallen victim to investment fraud did so having bought an unregulated product through an unauthorised firm.

A fifth (22%) of retirees holding unregulated products revealed they have invested more money into unregulated products over the last year than ever before, with 3% investing as often as once a month.

13% are still unaware that unregulated products bought through an unauthorised firm offered no protection from the Financial Ombudsman Service or FSCS.

Despite the risks, nearly half (48%) of those investing in unregulated products through unauthorised firms do so without getting professional advice or checking publicly available investor information.

Previous FCA research found that those over 65 with savings in excess of £10,000 were three and a half times more likely to fall victim to investment fraud.

Mark Steward, Director of Enforcement at the FCA, commented: "You don’t need to be gullible to lose money to a scam or fraud. Fraudsters target financially sophisticated people too, who often don’t like to ask what might sound like silly or basic questions.

"Our research found that 60 per cent of those that have experienced investment fraud have not reported it, so the problem could be greater than we know and by reporting it you are helping us to protect others."