Regulators warn 5m at risk over pension scams
7 Aug 2019
The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) are joining forces this summer to warn the public about fraudsters targeting people’s retirement savings
7 Aug 2019
The warning follows research indicating 5m savers are at risk of falling for pension scams.
A survey of more than 2,012 adults aged 45 to 65 with a pension found 42% were at risk of falling for at least one of six common tactics used by pension scammers. These include 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.
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.
The research also found that those who consider themselves smart or financially savvy are just as likely to be persuaded by these tactics as anyone else.
Nearly a quarter (23%) of those questioned said they would be likely to pursue exotic opportunities for high returns in investments such as overseas property, renewable energy bonds, forestry, storage units or biofuels if offered to them.
One in six (17%) said they would be interested in an offer from a company that claimed it could help them get early access to their pension, despite the risk of a large tax bill.
The poll also found 23% of those surveyed said 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. 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.
As a result of the findings, the regulators are joining forces to urge pension savers to be ScamSmart and to check who they are dealing with before making any decision on their pension. Last year’s ScamSmart campaign resulted in more than 3,705 people being warned about unauthorised firms. This year’s campaign is currently running on TV, radio and online.
The four steps recommended by regulators are to reject unexpected pension offers whether made online, on social media or over the phone; check who they are dealing with on the FCA register before changing any pension arrangements; avoid being rushed or pressured into making any decision; and to consider getting impartial information and advice.
Guy Opperman, minister for pensions and financial inclusion, said: ‘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.’
Pat Sweet | 07-08-2019