Pension savers urged to ‘flip the context’ on fraud as scammers steal over £2 million in 2021

  • New FCA research reveals over £2 million has been reportedly lost to pension scammers since the start of 2021
  • Furthermore, the average loss to pension scams since the start of 2021 has been £50,949 – more than double the figure recorded in 2020 (£23,689)
  • More than two-thirds (68%) of pension holders claimed they were confident they could spot the signs of a scam – but only 28% realised a ‘free pension review’ offer was a classic scam indicator
  • Savers NINE TIMES more likely to accept ‘advice’ from someone online than a stranger in person

Tom Selby, senior analyst at AJ Bell, comments:

“It is shocking that £2 million has been lost to pension scams so far this year but in reality this is the tip of the iceberg.

“Most scams occur outside of pensions nowadays, with retirement savers over age 55 who can access their retirement pot flexibly one of the prime targets for fraudsters.

“We also know that the Coronavirus pandemic has led to an increase in vulnerability, with more than 27 million adults in the UK demonstrating characteristics of vulnerability such as poor health, negative life events, low financial resilience or low capability.

“Depressing as it is, scammers prey on this vulnerability to try to fleece people out of their hard-earned retirement savings.

“While steps have been taken to protect pension savers, Government and regulatory interventions can only do so much. It is vital individuals take responsibility, be careful before parting with their money and take the time to know the tell-tale signs of a scam.”

The rise of online scams

“Given huge numbers of scams now originate online, it is deeply worrying that so many people are both blind to textbook scammer tactics and apparently trusting of ‘advice’ they receive online. This cavalier approach is highly risky and risks leaving millions of people at the mercy of financial fraudsters.

“While the Government is under huge pressure from campaigners to include online advertising in the Online Safety Bill – something which would place a greater emphasis on the role played by the likes of Google and Facebook in hosting scam adverts – at this stage there is no guarantee this will happen.

“Even if it does, it’s inevitable scammers will evolve their tactics to attempt to dodge any new checks that are introduced.

“The FCA’s message to savers to ‘flip the context’ when they receive an online offer is absolutely right. People need to treat any unsolicited approach about their finances – be it in person or online – with a healthy dose of scepticism.

“If you are approached out of the blue with an investment ‘opportunity’ offering high returns, or an offer to access your pension before age 55, or a ‘free pension review’, or anything that sounds too good to be true, you should be extremely suspicious.

“Crucially, if you have any doubts whatsoever, do not hand over you cash and consider speaking to a regulated financial adviser before making a decision. Alternatively, the Government-backed Pension Wise service offers free guidance for people making decisions about their retirement.”

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