Action Fraud is warning savers to remain vigilant and protect their pensions, as figures from the national reporting centre for fraud and cyber crime reveal £1.8 million has already been lost to pension fraud this year.
Data from Action Fraud shows a steady fall in pension scam reports from 1,788 in 2014 to 358 in 2020 – a reduction of almost 80 per cent.
However, there has been an increase in reporting so far this year, with 107 reports of pension fraud received in the first three months of 2021. This is an increase of almost 45 per cent when compared to the same period in 2020.
Action Fraud have launched a national awareness campaign (Tuesday 20 April 2021) to remind the public about the importance of doing your research before making changes to your pension arrangements.
Pauline Smith, Head of Action Fraud, said:
“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 a 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.”
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.
Sadly, the true scale of pension fraud is likely to be much higher than what is being reported, as victims often don’t realise they have been scammed until many years later.
Nicola Parish, The Pensions Regulator’s Executive Director of Frontline Regulation, said:
“Pension scams are devastating with victims potentially losing life-changing sums.
“Savers must be cautious about making decisions about money that may have taken a lifetime to build, as it can be snatched away in an instant.
“Being ScamSmart and learning the signs of a scam can help prevent savers becoming a victim in the first place. Before making decisions about their pension savers should visit The Pensions Advisory Service website for impartial guidance or get financial advice from a FCA-authorised financial adviser.
“Savers should be able to be confident their pensions are secure. We want the pensions industry to help build that confidence by signing up our Pledge to Combat Pension Scams. By making the pledge, industry can show its intent to protect savers.”
Mark Steward, Director of Enforcement and Market Oversight at the Financial Conduct Authority (FCA), said:
“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 scam. Use the tools on our ScamSmart website to protect yourself and your retirement.”
Some simple steps to protect yourself 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 advisor 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 websiteto learn how to protect yourself from pensions scams.
If you suspect a scam, report it
If you think you’ve been a victim of pension fraud, contact your pension provider immediately and report it to Action Fraud online at actionfraud.police.uk or by calling 0300 123 2040.
You can also report an unauthorised firm or a scam to the FCA by using their reporting form or by calling 0800 111 6768.
Cold calls about your pension are illegal. You can report nuisance calls and messages to the Information Commissioner’s Office using their online reporting tool or by calling 0303 123 1113.
If you've agreed to transfer your pension and now suspect a scam, contact your pension provider straight away. They may be able to stop a transfer that hasn't taken place yet. If you are unsure of what to do contact the Pensions Advisory Service for help.