Pension scammers are targeting baby boomers in their droves, a report by Just Group has revealed.
Nearly a quarter of 55-74 year olds received unsolicited contact in the 12 months to October 2020 with scammers targeting billions of pounds build up in retirement pots.
More than £30million has been reportedly lost to pension scams since 2017 based on complaints filed with Action Fraud, according to the FCA and The Pensions Regulator.
Over 75s were around a third less likely to receive unsolicited approaches claiming to give them the chance to get money by ‘unlocking’ their pension early compared to Baby Boomers.
Scammers targeting pension pots have caused losses ranging from hundreds of pounds to as much as £500,000 with the typical victim being a man in their 50s.
Pension scammers are primarily focusing on three strategies: contacting people for free pension reviews, offering to ‘unlock’ pensions early or under the guise of dishing out retirement advice claiming to be from the Government.
The offer of a free pension review is the most widely used method towards baby boomers with 14 per cent receiving such unsolicited approaches, whilst 10 per cent reported being offered the chance to get money by unlocking their pension early.
These are often used to persuade people to invest in high charging, high risk schemes while accessing pensions early can trigger huge tax penalties.
‘The figures highlighted the potential dangers that people reaching or within pension access age face,’ said Stephen Lowe, group communications director at Just Group.
‘There is an epidemic of scam activity because fraudsters have worked out that the pensions of the baby boomer generation are rich pickings and some unsuspecting savers are open to ideas about how best to take and use that money.’
‘Promising quick access to cash lump sums or high returns on investments is an easy way to get people’s attention – and ultimately their cash.’
How should scam victims react?
Scam victims are often reluctant to speak out and help raise awareness of such crimes.
Only 24 per cent of people would tell close family if they were the victim of a scam, research by Hargreaves Lansdown has found.
Perhaps more worryingly, a large minority wouldn’t even report the crime to the police, with only 58 per cent saying they would.
‘Scam victims are reluctant to admit they’ve fallen foul of a fraudster, but staying silent means the scammers are free to continue targeting your family and friends,’ warned Sarah Coles, personal finance analyst at Hargreaves Lansdown
‘Those on the receiving end may feel foolish or embarrassed about losing money, even if it wasn’t their fault or they may be worried about telling people about their financial matters or how much they lost.’
However, there are many reasons why people should open up about scams, not least to warn family and friends, so they can avoid becoming victims as well.
‘The knowledge that someone they know has been a victim will make people more aware of the dangers and hopefully not fall prey to similar tricks,’ said Coles.
‘But telling the police is a must – so they can investigate.’
‘The more evidence they can gather about dodgy emails, texts or phone calls, the more knowledge they have in their battle against the fraudsters.’
How to protect yourself from pension scammers?
Scammers prey on hitting certain emotions and anyone is capable of falling foul of one if they are caught in the wrong place, at a difficult time in a negative mood.
A moment of panic, absent mindedness, temptation or stress could prove costly.
If you get an unexpected offer by email or text, it would be wise to ignore it and refrain from clicking on any link in an email or text message from senders you don’t already know.
Fake calls, emails or text messages claiming to be from the government offering retirement planning advice, was experienced across all generations.
Equally if you’re contacted out of the blue about an opportunity relating to your pension, the safest thing to do is to hang up.
If you receive a communication that claims to come from your pension provider, contact them separately through your usual means to check it out – do not give out your bank details.
‘Look out for tell-tale signs such as an unexpected cold call, email, or text and be especially wary of any messages that attempt to put you under pressure by claiming you have limited time to act,’ said Coles.
‘Be suspicious of anyone offering unrealistic returns or “once in a lifetime” opportunities. If anything sounds too good to be true, it usually is.’
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