Hundreds of victims of fraudsters targeting pension savings lost £91,000 on average last year, according to new data from two UK financial watchdogs.
Since rules were relaxed in April 2015 to give people over the age of 55 freedom to spend their pension pots as they wished, savers have been vulnerable to being tricked into transferring large sums of money to exotic or fraudulent investment schemes.
The 253 people who last year reported being victims of pension scams to Action Fraud, the UK’s national fraud reporting centre, lost a total of more than £23m.
The Financial Conduct Authority and the Pensions Regulator have now launched a joint television advertising campaign — with the slogan “Don’t let a scammer enjoy your retirement” — to warn the public about the tactics used by scammers.
While cold-calling is the most common method used to reach pension holders, the regulators have also warned people to be on their guard if they are promised high returns for low-risk schemes, and to be wary of being pressured into making a quick investment decision.
Citizens Advice has calculated that 10.9m consumers have received unsolicited contact about their pension since April 2015. And research by the Money Advice Service, a government-created body, suggests there could be as many as eight scam calls every second.
A new poll commissioned by the watchdogs found that about a third of pension holders aged 45 to 65 would not know how to check if they were speaking to a legitimate pensions adviser.
Nicola Parish, executive director at the Pensions Regulator, said the £91,000 typically stolen from a pension pot by fraudsters was a “huge amount of money”. “If someone cold-calls you about your pension, it’s probably an attempt to steal your savings,” she added.
The government has previously announced plans to ban all unsolicited direct marketing relating to pensions in a bid to protect consumers from theft, with the Treasury expected to produce regulations in the autumn.
Last year, Rosalind Altmann a former pensions minister in David Cameron’s government, told MPs that she had “desperately” tried to introduce a ban on pensions cold-calling while in government, but civil servants had resisted.
Mark Steward, executive director of enforcement and market oversight at the FCA, said the relatively large size of pension pots accrued over many years made them an “attractive target” for criminals.
In November last year, Frank Field, chair of the House of Commons work and pensions committee, suggested over-55s should be required to demonstrate they had a minimum level of secure retirement income before being given full freedom to spend their pension savings.
Margaret Snowdon, a non-executive director of the Pensions Regulator and chair of Pension Liberation Industry Group, has previously estimated that scam losses since 2015 could be more than £1bn.
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