At least one in 10 people aged 50 or over in the UK believe they have been contacted by pension scheme scammers in the last 12 months, Succession Wealth has revealed.
Only 22% of those who believe they have been contacted by fraudsters reported it to the authorities.
A spokesperson for Action Fraud, the UK’s fraud reporting centre, told International Adviser: “Criminals are believed to be fraudulently exploiting the pension liberation process in a number of ways.
“These include failing to advise members of the tax implications of receiving cash from their pension; failing to advise members of the full extent of fees to be paid in relation to any onward investment; falsely representing anticipated levels of returns when investments are either non–existent or incapable of providing such a return.
“The industry estimates that the current loss to the UK from this fraud type is £600m ($787m, €700m).”
The independent wealth manager reached out to 2,315 people aged 50 or over, in a representative study for the population in the UK.
Fraudsters will go the extra mile
Survey respondents who claim to have been contacted by scammers highlighted several different ways used to lure people in.
The majority (84%) claimed that fraudsters have been in touch at least once in the last 12 months, while 6% reported having been contacted over 10 times.
The preferred means of communication is via phone calls, with 68% of respondents saying they have received a pension scam call.
Pensions cold calling was banned by the UK government at the end of 2018 – but only for companies operating in the UK. Companies outside of Britain can still target current or soon-to-be pensioners.
Additionally, 27% of people received a scam email regarding pension schemes, and 4% received a face-to-face visit by scammers.
According to Succession Wealth, the offering of a “free” pension review was the most popular tactic used by fraudsters, as reported by 62% of respondents.
Second, 42% were offered an investment scheme that “promised high guaranteed returns”.
Some 27% said they were put under pressure to provide a quick decision, and a further 25% were told about investment opportunities for their savings without any details of the products.
“Our findings are very alarming and illustrate the potential scale of the problem that is pension scamming,” said Mark Stokes, head of communications at Succession Wealth.
“Some of the people being targeted are vulnerable and more needs to be done to protect them.”