5 million still at risk from scams, TPR warns
On the go: The Pensions Regulator has warned that as many as five million savers are still at risk from pension scams, as it renews its commitment to fighting fraudsters alongside the Financial Conduct Authority.
New research commissioned by the two regulators found that 42 per cent of those aged between 45 and 65 were likely to fall victim to at least one common scam tactic, despite multiple anti-scam campaigns and a ban on cold-calling.
Respondents who described themselves as hoping to increase their level of retirement income were more likely to succumb to a scam, at 60 per cent of respondents. People who say they are financially savvy are no less likely to fall for a common tactic than average.
Ploys tested by the research included 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.
Stellar investment returns proved the equal most tempting offer with 23 per cent showing vulnerability, despite assets like renewable energy projects involving high levels of risk for individual investors.
Despite the government´s move to ban cold-calling in January, the same proportion of respondents said they would ask for further information if contacted about their pension out of the blue.
Access to a pension before the age of 55, which carries huge tax penalties, proved too tempting for 17 per cent of respondents.
In response, the regulators are doubling down on their ScamSmart campaign, launched last year across various media platforms.
Guy Opperman, minister for pensions and financial inclusion, said: “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 £34 million, and I’m backing this year’s effort to be bigger and better as we build a generation of savvy savers.”
Industry practitioners also have a role to play, said Caroline Escott, the Pensions and Lifetime Savings Association´s policy lead on investment and stewardship.
“Pension professionals must continue to remain vigilant as scammers are very quick to adapt their methods. We encourage trustees and administrators to get to grips with the recently revised code of practice from the Pensions Scams Industry Group," she said. "We also reiterate our call on the Government to introduce a tailored authorisation regime as soon as possible – focusing on those schemes which present the greatest risk – such as single-member schemes – to give people confidence that their pension scheme is a legitimate home for their retirement savings."