Pension scams can have a devastating impact on finances, with the average victim losing £91,000.
Two victims have lost more than £1 million to pension scams in recent years, according to official figures.
Action Fraud highlighted the devastating impact scams can have on finances, with the typical victim losing £91,000.
This ties in with earlier research from the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR), which showed that Brits aged between 45 and 65 are regularly targeted by scammers because they tend to have more money to put into investments.
According to the regulators, one in three don't know how to check whether they're speaking to a legitimate pensions advisor or a scammer.
Fraud activity has increased since pension freedoms gave over-55s the ability to access huge amounts of money with relatively limited oversight.
To mark the Scam Awareness 2019 campaign, which runs from 10-23 June, we've put together these tips to help older savers stay at least one step ahead of the pension scammers.
Signs of a scammer
If you get an unexpected phone call, be on your guard, advises Nicola Parish, executive director of The Pensions Regulator: “if someone cold calls you about your pension, it’s probably an attempt to steal your savings.
"Our message is clear – hang up and report it.”
Other scammer tactics identified by regulators include:
- Unexpected contact about your pension via phone, post or email;
- A 'free pension review';
- 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).
What should I do if I'm suspicious?
The FCA and TPR recommend you always reject unexpected pension offers.
You can check if you're dealing with an authorised firm using the online FCA register or calling the FCA on 0800 111 6768.
Also have a look at the FCA's ScamSmart website, where you can find extra advice and report scammers.
Cold calling ban: when can a company contact me?
In a bid to better protect the public, the Government recently introduced a ban on pension cold calling. The move also includes texts and emails.
So does that mean any, call is a scam? Almost certainly... unless it falls under one of the two following exceptions: companies can still contact customers who have expressly requested information from them, as well as making marketing calls to existing customers.
Check your credit report for anything suspicious.
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