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Pension scam victims lose 22 years of savings in one day

Victims of pension scams lost an average of £82,000 in the UK last year, which is equivalent to around 22 years’ worth of savings for workers on median salaries.

11 NOV 2019 | CHRIS SEEKINGS
Victims lose decades of savings ©Shutterstock
Victims lose decades of savings ©Shutterstock


That is according to new research from the Pensions Regulator (TPR), which also found that a quarter of people take less than 24 hours to decide on a pension offer.

Moreover, the findings show that 63% of savers would trust someone offering pension advice out of the blue – one of the main telltale signs of a scam.

The analysis is part of the TPR and Financial Conduct Authority’s (FCA) ScamSmart campaign, warning that victims face losing decades of savings in just one day.

“Once you sign on the dotted line, often there’s no second chance,” said TPR executive director of frontline regulation, Nicola Parish.

“Pension scammers ruin lives, stealing decades’ of savings with professional-looking websites, ‘expert’ advice, and an easy manner making it tough to spot the fraud.”

The research also found that 63% of savers are confident about making decisions related to their pension, and that highly educated people are more vulnerable to scammers.

Savers with a university degree are 40% more likely to accept a free pension review from an unfamiliar company, and 21% more likely to accept early access to their pension.

Cold-calls, offers of free pension reviews, and promises of high rates of return, are some of the techniques used by fraudsters.

Introducer firms invite people to transfer their savings into occupational pension schemes, but often mislead clients about their expertise and guaranteed returns.

Members' funds are then largely invested in unregulated investments in storage units, which do not yield the level of returns promised.

“Scammers employ clever techniques, such as seeking to establish ‘social similarity’ by faking empathy and a friendly rapport,” said psychologist Honey Langcaster-James.

“People need to know how to spot the signs of a scam so they don’t fall for psychological tricks.”

Pension savers can test how vulnerable they are to scams by taking on online quiz here.


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