The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) are running a TV advertising campaign to urge the public to be on their guard when receiving unexpected offers about their pension, and to check who they are dealing with.
The two regulators have launched ‘ScamSmart‘ advertising targeting pension holders aged 45 to 65, the group felt to be most at risk of pension scams. This comes as a new poll commissioned by the regulators reveals that almost a third (32pc) of pension holders aged 45 to 65 would not know how to check whether they are speaking with a legitimate pensions adviser or provider.
Scammers lure people into transferring their pensions into fraudulent schemes, stealing an average of £91,000 per victim. Victims of pension scams can lose their life savings, and be left facing retirement with limited income, the FCA and TPR warn. They are calling the public’s attention to the tactics used by pensions scammers. One of the most common tactics is to offer a ‘free pension review’. Research reveals that one in eight 45 to 65-year-olds surveyed (12pc) said they would trust an offer of a ‘free pension review’ from someone claiming to be a pension advisor. Cold calling is by far the most common method used to initiate pension fraud. Other scam 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; and
– Claiming to be able to unlock money from an individual’s pension (which is normally only possible from age 55).
It is believed that only a minority of pension scams are ever reported. The FCA and TPR are urging anyone who believes they may have been targeted to come forward.
Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, said: “The size of individual pension pots makes pensions savings an attractive target for fraudsters. That’s why we’re urging anyone who is thinking about transferring their pension to check who they are dealing with and only use firms authorised by the FCA. Pension scams can cause victims significant harm – both financially and mentally. If you are ever in doubt about a pension offer, visit the ScamSmart website.” And Nicola Parish, Executive Director, TPR, 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.”
If people aged 50 or over do require free independent advice they can contact the government-backed Pension Wise service. To book a free appointment visit www.pensionwise.gov.uk/en (link is external). The Treasury intends to lay regulations to ban pension cold calling in the autumn. Visit www.fca.org.uk/scamsmart.
