Pension scam victims losing 22 years of pension savings in 24 hours

Pension scam victims could lose 22 years’ worth of savings within 24 hours, according to new analysis from The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA).

The research, part of the regulators’ joint ScamSmart campaign, has revealed that it can take 22 years for a saver to build a pension pot of £82,000 – the average amount victims lost to scams in 2018.

The TPR and FCA, however, revealed that many savers are at risk of falling for scammers tactics within 24 hours. The research, which was gathered by polling thousands of adults aged between 45 and 65 across two Censuswide commissioned surveys, revealed that 24% of those asked admitted to taking 24 hours or less to decide on a pension offer.

FCA executive director of enforcement and market oversight, Mark Steward, said: “We know many people have big plans for their retirement, whether it’s seeing new places, learning new skills or helping their families out financially.

“Pension scammers destroy those dreams, often forever. So be ScamSmart. Reject unsolicited approaches offering ‘help’ with your pension and get advice from an FCA authorised firm before making big changes to your pension fund. Make sure your lifetime savings stay yours.”

The analysis also revealed that overconfidence could also lead to savers missing the signs of a scam.

Despite 63% of surveyed savers saying they would be confident to make a decision about their pension, the same proportion said they would trust someone offering pensions advice out of the blue – one of the main warning signs of a scam.

TPR executive director of frontline regulation, Nicola Parish, said: “Pension scammers ruin lives, stealing away decades’ of savings with professional-looking websites, ‘expert’ advice and an easy manner making it tough to spot the fraud.

“But once you sign on the dotted line, often there’s no second chance. Scams can happen to anyone, so before making any decision about your pension, take your time, be ScamSmart and always check who you are dealing with.”

Furthermore, the new analysis indicated the more highly educated the person, the more likely they are to fall for a pension scam.

Those with a university degree were 40% more likely to accept a free pension review from a company they’d not dealt with before, and 21% were found to be more likely to take up the offer of early access to their pension pot – both of which are common scam tactics.

Psychologist, Honey Langcaster-James, added: “Scammers employ clever techniques, such as seeking to establish ‘social similarity’ by faking empathy and a friendly rapport with their victims.

“They can win your trust in a short space of time, and by engaging with them you leave yourself vulnerable to losing a lot of money very quickly. People need to know how to spot the signs of a scam, so they don’t fall for psychological tricks.”

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