Scammers have tricked people out of more than £2.2m of their retirement savings in the first five months of this year, with average losses totalling over £50,000 per person.
Most scams are online, with new research from the regulator the Financial Conduct Authority revealing that people are nine times more likely to accept advice from someone online than they would from a stranger they met in person.
Jon Greer, head of retirement policy at Quilter said: “Most of us are hardwired to ignore the ‘get rich quick’ schemes we hear about in the pub, and we know to take any unsolicited face-to-face financial propositions with a pinch of salt. Yet when we go online, we are often lulled into a false sense of security and our instincts can go out the window.
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“The FCA’s research suggests that all too often, people incorrectly assume they can trust what they see online to be genuine. They trust that because a pension ‘opportunity’ appears on a website or a search engine that it must be the real deal. Often, however, it is a scam.”
In the year to May 2021, Action Fraud received 506 reports of pension fraud, with reported losses estimated to be £8.1m.
How to spot a scam
There are several signs to watch out for that could indicate you’re being targeted by a scam. These include:
• You’re offered returns that seem too good to be true
• You’re contacted out of the blue and told you’re eligible for a free pension review
• You’re told you can release money from your pension early, even though you’re not yet 55
• You’re urged to act quickly to take advantage of a supposed investment opportunity
Research conducted by LV last year found that 7.6m (14%) of adults have been contacted by someone other than their pension provider encouraging them to move or transfer money from their pension. Around 4.4m people said that they know someone who has fallen victim to a pension scam.
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Gareth Shaw, head of money at the consumer association Which?, said: "Fraudsters are using increasingly sophisticated techniques to trick consumers into handing over the pension savings they have built up over decades. Search engines like Google are awash with adverts for investment schemes promising returns far greater than the paltry rates on offer from most savings accounts - and they are often designed to look just like the websites of well-known financial firms.”
If you’re considering making or pension transfer or accepting a review, always visit the FCA Register first to make sure the firm you’re dealing with is authorised, and make sure you use the contact details shown on the Register, and not the details the company has provided you with.
If you think you’ve fallen victim to a pension scam, report it to Action Fraud as soon as possible online at www.actionfraud.police.uk or by calling 0300 123 2040.