Savers looking to boost income 60% more likely to fall for scam

Those actively seeking to increase their retirement income who are presented with a pension scam are 60 per cent more likely to fall victim to it, joint research conducted on behalf of the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) revealed.

The two regulatory bodies have renewed their Scamsmart campaign to warn the public about fraudsters specifically targeting their retirement savings, with advertisement broadcast across multiple platforms including television, radio and online.

The source of the scams commonly originates from cold calls, offering free pension reviews, early access to cash before the age of 55 and access to investments with guaranteed high returns and time-limited offers.

Scammers frequently promise victims high returns from exotic or unusual investments, such as overseas property, renewable energy bonds, forestry, storage units or biofuels. Almost a quarter (23 per cent) of the respondents, aged between 45 and 65, admitted to likely pursuing opportunities if offered them.

Furthermore, the research found that those who consider themselves smart or financially savvy are just as likely to be tempted by these offers as others.

Supporting the campaign, high profile TV psychologist Honey Langcaster-James said: “We tend to assume that it would never happen to us because we think we’d notice something if it wasn’t right.

“But even the smartest and savviest among us can become victims of crimes and we do often have a ‘blind spot’. Sophisticated scammers take advantage of this and use powerful psychological techniques to build trust and rapport and ultimately to influence our behaviour.”

One in six (17 per cent) respondents said they would be tempted by an offer from a scammer to gain early access to their pensions savings, with many not wanting to wait until the age of 55.

According to figures from Action Fraud in 2019 victims of pension fraud reported that they had lost an average of £82,000.

Minister for pensions and financial inclusion Guy Opperman said last year’s campaign had prevented 370 people from losing as much as £34 million. He said: “We know we can beat these callous crooks, because getting the message out there does work.”

Hargreaves Lansdown senior analyst Nathan Long added: "Scams remain the thorn in the side of pension savers, with scammers seemingly not being put off by a ban on cold calling introduced earlier this year.

"As the regulators join forces to boost scam awareness, it’s important that savers are vigilant. If someone calls you out of the blue about your pension – simply hang up, and if someone is selling you an investment that seems too good to be true, it’s unlikely to be bona-fide."

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