On the go: Victims of pension scams lost an average of £82,000 to fraudsters last year, equivalent to 22 years’ worth of savings evaporating within 24 hours, according to the Pensions Regulator and the Financial Conduct Authority.
Almost one in four people admitted to taking a day or less to decide on a pension offer, according to research by the regulators as part of their joint ScamSmart campaign.
Worryingly, such overconfidence could also lead to savers missing the signs of a scam. Despite 63 per cent saying they are confident to make a decision about their pension, the same proportion would trust someone offering pensions advice out of the blue – one of the main warning signs of a scam.
Further still, the more highly educated the person, the more likely they are to fall for a pension scam. Those with a university degree are 40 per cent more likely to accept a free pension review from a company they have not dealt with before, and 21 per cent more likely to take up the offer of early access to their pension pot. Both are common scam tactics.
Nicola Parish, TPR’s executive director of frontline regulation, said: “Pension scammers ruin lives, stealing away decades’ of savings with professional-looking websites, ‘expert’ advice and an easy manner making it tough to spot the fraud. But once you sign on the dotted line, often there’s no second chance.”
Recently, a firm of pension administrators, XPS Pensions Group, found signs of potential scam activity increasing over the past two years to one in eight cases in 2018 from one in 12 in 2017.
Pension and human resources managers can point their colleagues to The Pensions Advisory Service, which provides free independent and impartial information and guidance.
HR managers should also advise their employees and members to check who they are dealing with before changing their pension arrangements by checking the FCA Register or calling the FCA helpline on 0800 111 6768 to see if the firm is authorised by the watchdog.
Gregg McClymont, director of policy at The People’s Pension said: “The recent Pensions Schemes Bill included legislation that would give greater protection to savers, although that has been paused due to the upcoming general election. It is vital that policymakers move swiftly to ensure that the law is tightened in the fight against ruthless scammers.”
