On the go: The Pensions Regulator and the Financial Conduct Authority have launched a joint media campaign to combat pension scams, amid the revelation that average losses from fraudulent and inappropriate inducements eclipsed the size of the average pension pot in the UK.
Victims of scams lost £91,000 on average in 2017, according to statistics published by the regulators – more than the median level of pension wealth in the UK, which according to the Office for National Statistics hit £58,000 over the two years to June 2016.
Occupational pension pots for 55 to 64-year-olds, one of the most commonly targeted demographics, were £104,000 on average, meaning a scam could could wipe out their retirement prospects.
Evidence is also merging that many consumers are poorly equipped to deal with the threat posed by scammers.
A survey commissioned by the regulators found that 32 per cent of pension holders aged between 45 and 65 do not know how to check whether they are speaking to a legitimate pensions adviser or a scammer.
Twelve per cent said they would trust a “free pension review” offered by an unknown adviser, a classic tactic of fraudsters.
Nicola Parish, the Pensions Regulator’s executive director of frontline regulation, alluded in a statement to the intention of the government’s forthcoming ban on pensions cold-calling, due to be laid in regulation in the autumn.
“£91,000 is a huge amount of money for someone approaching their retirement to suddenly have ripped from their savings,” she said. “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 two regulators will attempt to spread their message via a TV ad campaign. But Nathan Long, a senior pension analyst at Hargreaves Lansdown, said this would not be enough in isolation.
“Short-term scam awareness is helpful, but endlessly putting a plaster on the problem is not good longer term,” he said. “Bettering people’s understanding of pensions will also boost their resilience to scams, which is why the government’s midlife MOT initiative has the potential to be so valuable.”
