5 million pension savers at risk of scams – FCA and TPR claim

The UK’s Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) have warned that 42 per cent of pension savers in the UK, around five million people, are at risk to scammers.

This warning comes after new research from the two, which also found that the likelihood of falling victim to a scam increases to 60 per cent if a person is actively looking to increase their retirement income.

Pension cold calls, free pension reviews, claims of guaranteed high returns, exotic investments, time-limited offers and early access to cash before the age of 55, are the six most common tactics used by scammers, it claims.

Another finding of the report states that even if someone considers themselves to be financially savvy, they are just as likely to be persuaded into one of these schemes.

The regulators claim pensioners are tempted by high returns in investments such as overseas property, renewable energy bonds, forestry, storage units or biofuels. However, these are high-risk and not suitable for pensions.

Of the 45 to 65-year olds which were questioned by the regulators, 23 per cent stated they would likely pursue these opportunities if offered to them.

One in six (17 per cent) of 45 to 54-year old pension savers stated they would be interested in an offer from a company which claims it could help give them early access to their pension. Although, accessing the pension before 55 is likely to result in a higher tax bill for the saver.

Finally, 23 per cent of those questioned said they would talk with a cold caller discussing pension plans, despite the government’s ban on pension cold calls.

Victims of pension fraud in 2018 lost an average of £82,000, the regulators claim.

Guy Opperman, Minister for Pensions and Financial Inclusion said, “Pensions are one of the largest and most important investments we’ll ever make and robbing someone of their retirement is nothing short of despicable.

“We know we can beat these callous crooks, because getting the message out there does work. Last year’s pension scams awareness campaign prevented hundreds of people from losing as much as £34 million, and I’m backing this year’s effort to be bigger and better as we build a generation of savvy savers.”

The regulators have offered four steps to protect themselves from pension scams. These include rejecting offers made online, via social media or on the phone, do not rush decisions, and consider getting impartial information and advice. Furthermore, they state to check with the FCA register to know who they are dealing with.


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