The threat to pension savings continues to diversify, as scammers seek new ways to target people’s retirement pots, according to a new report from The Pensions Regulator.
Fraudsters have shifted away from ‘pension liberation’ schemes and towards investment scams targeting over-55s, the findings showed.
Brand impersonation and cloned companies were found to be an area of concern, with the Covid-19 pandemic driving an increase in the number of cloned websites used to facilitate fraud. High or unsubstantiated fees involved in pension transfers also appeared to be an issue.
The findings showed while pensions cold-calling has declined, scammers have shifted their focus to social media channels.
On average, people were found to have lost £75,000, although some losses have run into millions.
Tom Selby, head of retirement policy at AJ Bell, said: “Despite substantial Government and regulatory efforts to clamp down on fraudsters, financial scams continue to ruin people’s lives.
“The average scam loss is estimated to be in the region of £75,000, around £13,000 higher than the average value of a pension pot accessed for the first time. In short, many scam victims will see their entire retirement blown apart, with no guarantees they will get any of their money back.”
Selby said post-pension freedoms, encouraging people over 55 to withdraw their funds and invest in fake vehicles is the easiest way for scammers to make money and called upon the government to continue to raise awareness and education around scams.
He added: “Policymakers and the wider industry have ramped up efforts to protect savers from scammers in recent years, with by far the most effective tool being education. The best way to avoid being scammed is to understand the tell-tale signs, which remain things like unregulated investment ‘offers’ that are too good to be true, high fees and unsolicited approaches out of the blue.
“If you are at all unsure about where you’re about an investment, stop, think and check the firm you are dealing with is regulated.”