The regulators found that, on average, it takes a saver 22 years to build a pension pot of £82,000 ($105,000, €95,160), which was the average sum victims lost to scams in 2018.
And despite 63% of survey respondents feeling confident in making a decision about their pension, the same percentage claimed they would trust someone offering pension advice out of the blue, leaving them vulnerable.
The findings follow research conducted by Succession Wealth which found that, between April 2018 and April 2019, over 125,000 people in the UK lost money to pension scams.
The watchdogs also uncovered a correlation between education and pension scams.
But it’s highly educated people who are at a greater risk of falling victim to fraudsters.
Those with a university degree are 40% more likely to accept a free pension review from an unknown company, and 21% more likely to accept an offer to access their pots.
These are two common tactics used by fraudsters, the regulators warned.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “We know many people have big plans for their retirement, whether it’s seeing new places, learning new skills or helping their families out financially.
“Pension scammers destroy those dreams, often forever.
“Reject unsolicited approaches offering ‘help’ with your pension and get advice from an FCA authorised firm before making big changes to your pension fund.
“Make sure your lifetime savings stay yours.”
Nicola Parish, executive director of frontline regulation at TPR, said: “Pension scammers ruin lives, stealing away decades’ of savings with professional-looking websites, ‘expert’ advice and an easy manner making it tough to spot the fraud.
“But once you sign on the dotted line, often there’s no second chance.
“Scams can happen to anyone, so before making any decision about your pension, take your time, be ScamSmart and always check who you are dealing with.”
As people plan for their retirement, they should also prepare themselves for being approached by scammers and make sure they are aware of all the warning signs.
“Pension fraud should be at the forefront of people’s minds when planning their future years,” said Tom Clemenstson, director of consumer at secure payments solution Shieldpay.
“It’s a lifetime’s worth of savings which, with the wrong decision, can disappear in the blink of an eye. The warning signs should be common knowledge amongst retirees, but current lack of awareness is enabling scammers to drain far too many people’s pension pots dry; even the savviest of savers are at risk.”
Tom Selby, senior analyst at AJ Bell, said: “Hubris and trusting the ‘advice’ of strangers are proving to be the undoing of scam victims. This is a recipe for disaster as fraudsters prey on the good nature of hard-working savers.
“The results of scams are often heartbreaking, with thousands of people losing pensions they have worked their entire lives to diligently build up. In many cases victims are left with little or nothing to fall back on, and have to face up to working longer or living in penury in retirement.”
More needs to be done
The UK banned pension cold-calling at the beginning of 2019, but scammers continue to find alternative ways to defraud their victims – namely calling from outside the UK.
“Sadly, despite interventions from government and a drive to raise awareness, scammers aren’t going anywhere, so savers need to be more suspicious when they receive offers out of the blue,” Selby added.
“For many people their retirement pot could well be the most valuable thing they own, so spending a bit of time researching before parting with it could save a lot of pain.”
This is why James Jones-Tinsley, self-invested pension specialist at Barnett Waddingham, is calling for a review on ban’s effectiveness.
“We will soon be approaching the anniversary of the pensions cold-calling ban, and it is important that HM Treasury work with the regulators to reflect on how successful or otherwise it has been to date.
“It’s critical that consumers are aware of the measures in place to protect them, including the ban and ScamSmart, and of the steps they can take if they have fallen victim to a scam and need support.”