Average losses from pension scams double in a year, with victims typically losing more than £50,000 | Business News

Average losses from pension scams double in a year, with victims typically losing more than £50,000 | Business News


Pension scam victims are losing over £50,000 on average, more than double the typical figure reported last year.

Action Fraud said complaint data showed that the average loss this year so far has been £50,949, compared with £23,689 during 2020.

But the losses in each case ranged from less than £1,000 to as much as £500,000, and the real figures could be higher as many scams go unreported.

The Financial Conduct Authority (FCA) wants pension savers to “flip the context” if they are approached online with tempting offers.

This means imagining how they would react if the same offer was made to them by a stranger in a pub, for instance.

FCA research found that pension savers could be nine times more likely to accept advice from someone online than they would be from a stranger in person.

Just 1.1% of pension holders would take advice from a stranger, but 9.95% would accept financial advice online.

They would also be five times as likely to be interested in a free pension review from an online stranger than someone in their local pub.

Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Imagine a stranger in a pub offering free pension advice and then telling you to put those savings into something they were selling. It is difficult imagining anyone saying yes to that.

“It’s no different online. Whether you’re on social media or checking your emails, if someone offers you free pension advice, ‘flip the context’ and imagine them doing the same thing in real life. Stop and think how you would react.

“Fraudsters will seek out every opportunity to exploit innocent people, no matter how much they have saved.

“Check the status of a firm before making a financial decision about your pension by visiting the FCA register. Make sure you only get advice from a firm authorised by the FCA to provide advice, before making any changes to your pension arrangements.”

Half of pension holders would be unlikely to make an impulse buy in a retailer’s flash sales, the FCA research found, but 36% could not recognise “time-limited offers” as a sign of a possible pension scam.

Time-limited offers are often used by scammers to pressure people into making an ill-considered decision.

There is more information on pension scams on the FCA website but the authority has also provided five common warning signs:

• Being offered a free pension review out of the blue

• Being offered guaranteed higher returns – people who claim they can get you better returns on your pension savings

• Being offered help to release cash from your pension, even though you are under 55

• High-pressure sales tactics – scammers may try to pressure you with “time-limited offers” or send a courier to your door to wait while you sign documents

• Unusual investments which tend to be unregulated and high-risk



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