Pension scam warning: Victims losing £80,000 on average – what should you watch out for?


The BBC host said the Government has attempted to solve the problem by banning cold-calling, but unfortunately the plan “hasn’t worked”. Nina Warhust explained how to avoid being targeted by the pension scam, which targets those within the 45-65 age range by asking to “review” their pension pot. The BBC business presenter explained: “So this is people who have saved some time for decades and then had up to £80,000 taken from them. So this is where people are approached, cold called, cold texted, emails, even approached on social media.

“Somebody saying they will ‘review’ their pension pot and often they’ll encourage them to invest in a scheme that’s too risky or the money disappears completely. So this is happening more and more, and the amount of money on average is £80,000.”

Ms Warhurst added: “The Government has tried to deal with the problem by banning cold calling, but it’s not working. Let’s have a look at some of the figures.

“So the average pension pot is over £100,000, that’s when you get to retirement age and recently the Government made changes that means you access that as a lump sum when you get to the age of 55. Why that’s meant is that £28billion in lump sum money has become available.

“So you can see why scammers have seen that as quite appealing, that’s quite a tasty number for them. And according to Action Fraud, 180 pension scams were reported to them last year with an average of £82,000.

READ MORE: Pension scam warning: Victims can lose 22 years of savings in 24 hours

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“Now they said that they think there’s a lot more money than that that’s been lost and because people, if it has happened to them, are quite reluctant to come forward. People obviously feel quite humiliated by it. What’s clear in this new research that’s come out is it can happen to anybody.

“You think ‘I wouldn’t be that daft, I wouldn’t fall for the scammers’, but the advice is never think that you know it all because everybody can fall victim to it.”

Nicola Perish, Executive Director of The Pensions Regulator, told the BBC: “We know that the age group 45 to 65 are a particularly vulnerable group, and are likely to be being targeted.

“They’re the ones that the scammers will have in mind because they will be thinking about what to do in retirement, they’ll be thinking about accessing their pensions pot. They’re probably the ones that are more vulnerable to offers of high returns on the money, or some unusual investments, if they sound too good to be true, they probably are.”

The comments come as new research from the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) has found that almost one in four people (24 percent) who were surveyed admitted to taking 24 hours or less to come to a decision on a pension offer.

Despite nearly two-thirds (63 percent) of those asked saying they are confident in making a decision about their pension, almost the same proportion (63 percent) said they would trust someone offering pensions advice out of the blue.

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Worryingly, the FCA and TPR said that this is one of the main warning signs of a scam. While many people may think they’re unlikely to fall for a scam, the new analysis has found that certain people could be more likely to fall for a pension scam.

According to the research, the more highly educated the person, the more probable it is that they would fall for a pension scam. The findings suggest that those with a university degree are 40 percent more likely to accept a free pension review from a company they’ve not dealt with before, and 21 percent more likely to opt for the offer of early access to their pension pots – both of which are common scam tactics.

Highlighting the devastating impact pension fraud can have, the regulators are warning savers to be aware of the warning signs of a scam, to be ScamSmart, and to always check who they are dealing with prior to coming to a decision about their pensions.

Free independent and impartial information and guidance is available from the Pensions Advisory Service. People aged 50 or older who require free independent advice can contact the government-backed Pension Wise service, and book a free appointment online.



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