The research, as part of the regulators’ joint ScamSmart campaign has found it could take 22 years for a saver to build a pension pot of £82,000. In 2018, this was the average amount victims sadly lost to these scams. Despite the length of time it takes to build the pension savings, many savers could be at risk of falling for scammers’ tactics within 24 hours.
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.
Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, 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.”
Nicola Parish, Executive Director of Frontline Regulation, TPR, 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.”
Honey Langcaster-James, psychologist, 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.”
Gregg McClymont, director of policy at The People’s Pension commented on the analysis: “Pension fraud is a very real problem, a crime which has become increasingly prevalent over the past decade, so anything that raises awareness is to be welcomed.
“The recent Pensions Schemes Bill included legislation that would give greater protection to savers, although that has been paused due to the upcoming General Election.
“It is vital that policy makers move swiftly to ensure that the law is tightened in the fight against ruthless scammers and recognise that they regularly change their methods.