Research from the UK's Financial Conduct Authority (FCA) and TPR has revealed the average amount lost to pension scammers in 2018 was £82,000--a sum that takes the average earner 22 years to accrue.
The report also found that nearly two-thirds (63%) of people would trust someone offering pension "advice" almost out of the blue. Worryingly, 1 in 4 people would take 24 hours or less to decide on a pension offer presented to them.
Tom Selby, senior analyst at AJ Bell, commented: "Hubris and trusting the ‘advice' of strangers are proving to be the undoing of scam victims. This is a recipe for disaster as fraudsters prey on the good nature of hard-working savers.
Hubris and trusting the ‘advice' of strangers are proving to be the undoing of scam victims. This is a recipe for disaster as fraudsters prey on the good nature of hard-working savers."
"The results of scams are often heartbreaking, with thousands of people losing pensions they have worked their entire lives to diligently build up. In many cases victims are left with little or nothing to fall back on, and have to face up to working longer or living in penury in retirement.
"Sadly, despite interventions from Government and a drive to raise awareness, scammers aren't going anywhere, so savers need to be more suspicious when they receive offers out of the blue.
"For many people their retirement pot could well be the most valuable thing they own, so spending a bit of time researching before parting with it could save a lot of pain."
AJ Bell have published the following advice to avoid falling victim to pensions scams:
- Be extremely wary of any investment ‘opportunities' that come out of the blue - for example through a cold-call - or people claiming to be ‘advisers' offering a ‘free pension review'. Professional advice is never free and so following the old maxim ‘if it sounds too good to be true, it probably is' is a sensible approach.
- Make sure you know who you are dealing with. After all, your pension could be the most valuable asset you own, so don't hand it over to someone unless you know their credentials check out.
- Slick fraudsters will sometimes pretend to be a bona fide company when in fact they are nothing of the sort, so have a look at the FCA register and Companies House to see if the firm you are dealing with actually exists.
- Don't be rushed or pressured - such tactics should set off a big red warning light in your mind and are often indicative of a scam.
- If you're at all unsure speak to a qualified, regulated financial adviser. You will need to pay for this but usually the benefit far outweighs the cost.