The UK’s national fraud and cyber crime reporting centre, Action Fraud, has received complaints which show that around £30.8m ($39.6m, €33.7m) has reportedly been lost to scams since 2017, the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) have revealed.
Fraudsters appear to target pension pots of any size, with losses ranging from less than £1,000 to over £500,000.
The two regulators said that the average victim is a man in his 50s, with football fans apparently the ones most targeted by scammers.
The FCA and TPR said that research shows that just 43% of football fans approaching retirement know how much is in their pension pot, and nearly half (45%) don’t know how to check if someone approaching them to talk about their pension is legitimate.
‘Your pension isn’t a football transfer’
The two watchdogs have teamed up with football commentator Clive Tyldesley, as part of their ScamSmart campaign.
Tyldesley said: “Scammers are very good at breaking down your defences and putting you under pressure with various deadlines. But your pension isn’t a football transfer – there are no deadlines.
“Your favourite team wouldn’t buy a new striker just because his agent says he’s good. They’d ask around, check out his stats, do some research – just like you should when handling your pension plans.
“Before you fall foul to savvy scammers, remember to take your time, seek advice, and speak to an FCA-authorised adviser. Don’t agree to anything you’re unsure of.”
Surprisingly, research from the two regulators discovered that 76% of football fans approaching retirement know the cost of the items related to the football team they support – such as a shirt or a season ticket – but only 43% know how much they currently have in pension pots.
Scams could result in the loss of a retirement nest egg in an instant
Similarly, platform Interactive Investor has found that 13% of adults in the UK admitted to falling victim to a scam.
Its ‘Great British Retirement Survey 2020’ revealed that 18% of those aged 72-77 and 20% of 77+ claimed to have been scammed.
The two most common types were investment fraud (32%) and current account fraud (22%).
Luckily, around 43% of respondents said they managed to get their money back; but 11% revealed that the experience put them off trying to sort out their financial affairs, as they fear being scammed again.
Myron Jobson, personal finance campaigner at Interactive Investor, said: “While the Premier League summer transfer window deadline is rapidly approaching, savers should be in no rush to make any decisions affecting their pension – so as not to be caught offside by individuals who don’t play by the rules.
“Pension scams are simply ghastly and, in the worst-case scenario, could result in the loss of a retirement nest egg in an instant.
“The coronavirus pandemic has created a perfect storm for crooks to shroud their nefarious schemes among the uptick in correspondence by legitimate organisations relating to coronavirus measures.
“Even the most seasoned investor can fall victim to scams, so it is more important than ever to take care with your money and look out for the warning signs,” he added.
‘Fraudsters will seek out every opportunity to exploit innocent people’
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “During these uncertain times, it is more important than ever to defend your lifetime savings from scammers.
“Fraudsters will seek out every opportunity to exploit innocent people, no matter how much or how little you have saved. You can check the status of a firm before changing your pension by visiting the FCA register, and get advice from an FCA-authorised firm before making any changes to your pension. And give scammers the boot.”
Charles Counsell, chief executive at TPR, added: “Scammers wreck lives and no matter how big or small your savings are, every pot is a target.
“It may seem tempting to make a change to your pension fund now, but it’s important not to rush. Before making any decision about your pension, take your time, and visit the ScamSmart website to always check who you are dealing with.”
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