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Five million savers at risk of scams, regulators warn

The FCA and the Pensions Regulator have warned that 42 per cent of pension savers, equivalent to five million people, could be at risk of pension scams.

The organisations have joined forces again to warn the public about fraudsters targeting people’s retirement savings.

New research suggests people could fall for at least one of six common tactics used by pension scammers.

This includes pension cold calls, free pension reviews, claims of guaranteed high returns and exotic investments.

It also includes time-limited offers and early access to cash before the age of 55 that can all tempt savers into risking their retirement income.

The warning is part of the ScamSmart campaign aimed at tackling pension fraud that resulted in more than 370 people being warned about unauthorised firms last year.

Regulators say the likelihood of being drawn into one or more scams increased to 60 per cent among those who say they were actively looking for ways to boost their retirement income.

All figures are from survey consultants Censuswide that conducted the online survey of 2,012 adults aged 45-65 with a pension between 24-28 June 2019.

The research also finds those who consider themselves smart or financially savvy are just as likely to be persuaded by these tactics as anyone else.

FCA rebuffs criticism it lacks resources to tackle scams

Pension savers are tempted by offers of high returns in investments such as overseas property, renewable energy bonds, forestry, storage units or biofuels.

But exotic or unusual investments are high-risk and unlikely to be suitable for pension savings.

Nearly a quarter (23 per cent) of the 45-65-year-olds questioned say 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 or 17 per cent of 45-54-year-old pension savers say they would be interested in an offer from a company that claimed it could help them get early access to their pension.

Of all those surveyed, 23 per cent say they would talk with a cold caller that wanted to discuss their pension plans, despite the government’s ban on pension cold-calls this January.

Pensions cold-calling to be banned from January

Nearly a quarter say 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.

Pensions minister Guy Opperman says: “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 £34m, and I’m backing this year’s effort to be bigger and better as we build a generation of savvy savers.”

Victims of pension fraud reported in 2018 that they had lost an average of £82,000.

FCA executive director of enforcement and market oversight Mark Steward adds: “It doesn’t matter the size of your pension pot – scammers are after your savings. Get to know the warning signs, and before making any decision about your pension, be ScamSmart and check you are dealing with an FCA authorised firm.”


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. The rise in the attraction of scams is complex but has its roots are in the rising costs of seeking advice, the complexity of the products, the numerous options available and the fall off in the number of advisers – all linked to the increased regulations.

    In other words the advice gap – what we all know at the coalface is getting wider.

    Add in the wild west of the social media platforms and you have the perfect storm.

    I really dont know what the answer is after talking to people who were mislead by scams as there is little common thread between them that I can see other than those mentioned above.

    Education is the key for the public and surely the social media platforms bear some responsibility for the adverts. However I am not holding my breath that the powers that be understand the problems or have any constructive ideas how to deal with them.

  2. The public can rest assured Deborah Jones and her team of 10 …or is it 100 ? are doing the best they can and working tirelessly to ensure your hard earned cash is safe.

    From what I gather Mark Stewart is unconcerned about the billions that they (FCA) have let slip the nett so far, because out of the 3,700 staff with a salary bill of over £101,000 average per head the 100 ..or is it 10 they have permanently working on this area have renewed focus.

    He goes on to say-:
    Deborah Jones has now fished out the hobnob that she over dunked and fell into her tea, so work has now been resumed to normal, word has it this was a major incident as it was a chocolate hobnob not a common run of the mill hobnob …phew catastrophe diverted, although soggy still very tasty !!

    My heart goes out to Deborah and her team…. this must of been a challenging and testing time !

  3. Remove unregulated investments from UK pensions and no one would see their pension funds stolen. The door would be closed almost immediately on day of implementation.

    It would cost a lot less than the current system. It will not require consultants being paid millions to find out why this is happening, who never give a solution that would close off future reviews and fees for them. No turkey votes for X-mas.

    It would save the consumers million, regulator millions, FOS and courts. Hmmmmmm, I wonder why none of these parties have suggested this.

  4. If this is the case and millions are at risk, does anyone still think pension freedom was a good idea?

    • Scams existed before pension freedoms indeed the majority of the scams we see reported now are from pre 2015. If anything pension freedom has reduced scams because pension liberation fraud now barely exists.

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