People actively looking to boost their retirement income who are presented with a pension scam are 60 per cent more likely to be drawn in by it.
The finding comes from research undertaken in June on behalf of the Financial Conduct Authority and The Pensions Regulator. The two regulators have renewed their Scamsmart campaign to warn the public about fraudsters targeting people’s retirement savings with adverts currently running on TV, radio and online.
The source of the scams originate from cold calls, offers of free pension reviews, early access to cash before the age of 55, plus access to investments with guaranteed high returns and time-limited offers.
A common approach is to offer high returns in exotic or unusual investments such as overseas property, renewable energy bonds, forestry, storage units or biofuels. Nearly a quarter (23 per cent) of the 45-65-year-olds questioned said they would be likely to pursue such opportunities if offered them.
The research found that those who consider themselves smart or financially savvy are just as likely to be persuaded by these tactics as anyone else.
High profile TV psychologist Honey Langcaster-James is being used as part of the campaign to help explain how people fail to spot scams.
“We tend to assume that it would never happen to us because we think we’d notice something if it wasn’t right,” she said. “But even the smartest and savviest among us can become victims of crimes and we do often have a ‘blind spot’. Sophisticated scammers take advantage of this and use powerful psychological techniques to build trust and rapport and ultimately to influence our behaviour.”
Helping savers to access their pensions early also proved to be a persuasive scam tactic. One in six (17 per cent) 45-54-year-old pension savers said they would be interested in an offer from a company that claimed it could help them get early access to their pension.
According to figures from Action Fraud in 2019 victims of pension fraud reported that they had lost an average of £82,000.
Minister for Pensions and Financial Inclusion Guy Opperman, said last year’s campaign had prevented 370 people from losing as much as £34 million. He said: “We know we can beat these callous crooks, because getting the message out there does work.”
More information on the campaign can be found here.
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