"Last year’s pension scams awareness campaign prevented hundreds of people from losing as much as £34 million"
The FCA and The Pensions Regulator are issuing a new warning against fraud after finding that 42% of pension savers - the equivalent of 5 million people - are at risk of falling for common tactics used by pension scammers.
The likelihood of being drawn into one or more scams increased to 60% among those who said they were actively looking for ways to boost their retirement income.
Pension cold calls, free pension reviews, claims of guaranteed high returns, exotic investments, time-limited offers and early access to cash before the age of 55 are all ways savers are tempted into risking their retirement income.
Yet those who consider themselves smart or financially savvy are just as likely to be persuaded by these tactics as anyone else.
Pension savers were tempted by offers of high returns in investments such as overseas property, renewable energy bonds, forestry, storage units or biofuels. Nearly a quarter (23%) of the 45-65-year-olds questioned said they would be likely to pursue these exotic opportunities if offered them.
Helping savers to access their pensions early also proved to be a persuasive scam tactic. One in six (17%) 45-54-year-old pension savers said they would be interested in an offer from a company that claimed it could help them get early access to their pension.
23% of all those surveyed said they’d talk with a cold caller that wanted to discuss their pension plans, despite the government’s ban on pension cold-calls this January. Nearly a quarter said they would ask for website details, request further information or find out what they’re offering, even if the call came out of the blue.
Victims of pension fraud reported in 2018 that they had lost an average of £82,000.
Pensions minister Guy Opperman said: "Pensions are one of the largest and most important investments we’ll ever make, and robbing someone of their retirement is nothing short of despicable.
"We know we can beat these callous crooks, because getting the message out there does work. Last year’s pension scams awareness campaign prevented hundreds of people from losing as much as £34 million, and I’m backing this year’s effort to be bigger and better as we build a generation of savvy savers."
Nicola Parish, executive director of frontline regulation at TPR, commented: "Scammers don’t care who they prey on or how many lives they wreck. If you ignore the warning signs you put yourself at risk of losing your savings.
"Victims are left devastated by what has happened to them. Make sure neither you nor any of your loved ones have to go through that ordeal."
Honey Langcaster-James, psychologist, added: "Most people are confident in their ability to avoid being scammed. We tend to assume that it would never happen to us because we think we’d notice something if it wasn’t right. But even the smartest and savviest among us can become victims of crimes and we do often have a ‘blind spot’. Sophisticated scammers take advantage of this and use powerful psychological techniques to build trust and rapport and ultimately to influence our behaviour."