Pension scam victims lose average of £91,000

A new campaign warns consumers to beware of pension scammers after figures revealed that victims lost an average of £91,000 last year.

The Pensions Regulator and the Financial Conduct Authority have launched a joint advertising campaign to raise awareness of highly sophisticated scams that lure people into transferring their pensions into fraudulent schemes.

Victims of pension scams can lose their life savings, and be left facing retirement with limited income.

One of the most common tactics used by fraudsters is to offer a ‘free pension review´. Other tactics include:

• Unexpected contact about your pension via phone, post or email
• 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)

People should be on their guard when receiving unexpected offers about their pension and should check who they are dealing with, the two regulators said.

The ScamSmart advertising campaign targets pension holders aged between 45 and 65, the group most at risk of pension scams.

Nicola Parish, executive director of the Pensions Regulator, said: “£91,000 is a huge amount of money for someone approaching their retirement to suddenly have ripped from their savings. 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.”

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 contact centre on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA
• Don´t be rushed or pressured into making any decision about your pension
• Consider getting impartial information and advice