Retirement savers warned to protect pension savings from fraudsters

Consumers saving towards retirement are being warned to protect their pensions from fraudsters, as Action Fraud reports that £1.8 million has been lost to pension fraud so far this year.

Action Fraud data found that in the first three months of this year, there were 107 reports of pension fraud received, which is an increase of almost 45% compared to the same period during 2020.

Prior to this year, the number of pension scams had been falling steadily, from 1,788 in 2014 to 358 in 2020, however with the year-on-year increase for the first three months of 2021, reports may rise this year.

According to Action Fraud, Pension scams often include free pension reviews, ‘too good to be true’ investment opportunities, or offers to help release money from your pension even though you’re under-55. Pauline Smith, head of Action Fraud, explained: “Criminals are malicious and unapologetic when it comes to committing pension fraud. They are motivated by their own financial gain and lack any kind of empathy for their victims, who can often lose their whole life savings to these scams.

“We know pension fraud can have a devastating impact, both financially and emotionally, but any one of us can fall victim to fraud and it’s nothing to feel ashamed or embarrassed about. It’s incredibly important that instances of pension fraud, and attempted scams, are reported to Action Fraud. Every report helps police get that bit closer to the people committing these awful crimes. Reporting to Action Fraud also allows our specialist victim-support advocates to provide people with important protection advice and signpost them to local support services.”

Mark Steward, director of enforcement and market oversight at the Financial Conduct Authority (FCA), added: “Scammers target people from all walks of life. It doesn’t matter the size of your pension pot, scammers destroy retirement dreams so it’s vital that consumers know how to protect themselves from scammers.

“The best way to protect yourself is to know who you’re dealing with. Always check the FCA Register to make sure that anyone offering you pension advice or any other financial service is authorised by the FCA to perform the service they are providing for you, and that the details they are providing are the same as those on the Register.

“Unexpected and unsolicited offers, free pension reviews, promises of high returns which sound too good to be true and pressure to make a decision quickly are all warning signs of a scam. Use the tools on our ScamSmart website to protect yourself and your retirement.”

Action Fraud has outlined these simple steps that consumers can follow to help protect themselves from pension scams:

• Reject unexpected pension opportunities, such as free pension reviews or investment opportunities involving your pension, whether made via email, social media, text, or over the phone.
• Research who you’re dealing with before changing your pension arrangements – check the FCA Register, or call the FCA on 0800 111 6768 to see if the firm is authorised by the FCA.
• Don’t be rushed or pressured into making any decision about your pension – consider getting impartial information and advice from a financial adviser authorised by the FCA to help you make the best decision for your own personal circumstances.
• Be suspicious if you are contacted out of the blue about an investment opportunity –seek advice from trusted friends, family members or an independent professional advice service before making a significant financial decision, especially when it involves your pension pot. Even genuine investment schemes can be high risk.
• Be ScamSmart and visit the ScamSmart website to learn how to protect yourself from pensions scams.