Pension savers face increased risk from scammers
11 Nov 2019
People with degree-level education are more a risk of falling victim to a pension scam than others, claims the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR)
11 Nov 2019
Research from two surveys, each of over 2,000 adults aged 45-65 with a pension to scammers, found that a quarter (24%) of those polled admitted to taking only 24 hours or less to decide on a pension offer.
Despite nearly two-thirds (63%) saying they are confident about making a decision about their pension, the same proportion (63%) would trust someone offering pensions advice out of the blue – one of the main warning signs of a scam.
New analysis as part of the regulators’ joint ScamSmart campaign found that it takes 22 years for a saver to build a pension pot of £82,000 – the average amount victims lost to scams in 2018.
But despite this, many savers could be at risk of falling for scammers tactics within 24 hours.
The more highly educated the person, the more likely they are to fall for a pension scam. Those with a university degree are 40% more likely to accept a free pension review from a company they’ve not dealt with before, and 21% would take up the offer of early access to their pension pot. The regulators caution that these are both common scam tactics.
Last year, 180 people reported to Action Fraud that they had been the victim of a pension scam, losing on average £82,000 each.
The FCA and TPR said the true number of victims is likely to be higher as scams often go unreported and those affected may not realise they have been scammed for several years.
Both regulators are now promoting the ScamSmart campaign to encourage greater awareness of the issues.
Mark Steward, executive director of enforcement and market oversight, FCA, said: ‘We know many people have big plans for their retirement. Pension scammers destroy those dreams, often forever. So be ScamSmart.
‘Reject unsolicited approaches offering “help” with your pension and get advice from an FCA authorised firm before making big changes to your pension fund.’
As well as rejecting unexpected pension offers, the regulators caution against rushed decision making, and urge savers to check who they are dealing with before changing pension arrangements, and consider getting impartial information and advice.
The regulators recommend four simple steps to protect yourself from pension scams:
- reject unexpected pension offers whether made online, on social media or over the phone;
- check who you’re dealing with before changing your pension arrangements – check the FCA Register or call the FCA helpline on 0800 111 6768 to see if the firm is authorised by the FCA;
- don’t be rushed or pressured into making any decision about your pension; and
- consider getting impartial information and advice.