According to the latest figures from Action Fraud, the average loss from pension scams has reached £50,949 this year.

This figure is more than double the typical figure of £23,689 reported last year.

Action Fraud claimed that losses in each case ranged from less than £1,000 to as much as £500,000. Figures lost could be even higher than this as many scams go unreported.

Mark Steward, the Executive Director of Enforcement and Market Oversight at the Financial Conduct Authority (FCA), said: ‘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’

The FCA has lots of guidance on how to avoid these scams, their warning signs are as follows:

Scam offers often include:

  • free pension reviews
  • higher returns – guarantees they can get you better returns on your pension savings
  • help to release cash from your pension even though you’re under 55 (an offer to release funds before age 55 is highly likely to be a scam)
  • high-pressure sales tactics – the scammers may try to pressure you with ‘time-limited offers’ or even send a courier to your door to wait while you sign documents
  • unusual investments – which tend to be unregulated and high risk, and may be difficult to sell if you need access to your money
  • complicated structures where it isn’t clear where your money will end up
  • arrangements where there are several parties involved (some of which may be based overseas) all taking a fee, which means the total amount deducted from your pension is significant
  • long-term pension investments – which mean it could be several years before you realise something is wrong
  • remote access – scammers may pretend to help you and ask you to download software or an app so they can access to your device. This could enable them to access your bank account or make payments using your card

See more on the FCA website.

“Many people are struggling for money in recent times due to the effects of COVID-19 on businesses. Scammers are targeting these people and taking advantage of them. It is important that people avoid these scammers at all costs.”

Nigel Holland