It comes as analysis reveals cold calling, exotic investment offers and promises of early access to cash are being used by scammers to raid investments. The Daily Express this week told how unscrupulous advisers were fleecing retirees out of £2billion a year. The Financial Conduct Authority and the Pensions Regulator have joined forces to launch a scheme called ScamSmart in response to the crisis.
They warned that 42 percent of savers – equal to five million people across the UK – could be at risk of falling for at least one of six common tactics.
Writing exclusively for the Daily Express, Pensions Minister Guy Opperman said: “When we think about people being scammed it’s all too easy to assume it was their fault – that they should have seen it coming; they were naive, or stupid, to be conned.
“This is unfair. It ignores the sophistication of the snake oil salesmen who target pension pots.”
Pension cold-calls, free pension reviews, claims of guaranteed high returns, exotic investments, time-limited offers and early access to cash before the age of 55 are all scams designed to tempt savers into risking their retirement income.
Exotic or unusual investments are high-risk and unlikely to be suitable for pension savings. Yet nearly one quarter of those aged between 45-65 said they would be interested in a deal of this sort if one was offered. One in six said they would listen to an offer from a company claiming it could help them get early access to their pension.
And one in four said they would talk with a cold caller despite a government ban on this method of drumming up business. Those found knocking door-to-door face fines of up to £500,000. Last year victims reported an average loss of £82,000.
MP Frank Field, chairman of the Commons Pensions Select Committee, said yesterday: “Ripping off pension savers could be eliminated. We are calling on the government to shine the searchlights into that part of the financial industry that has settled down to misinforming, mischarging, overcharging and making a fat living off the hard-earned savings of pensioners.”
Mark Steward, of the Financial Conduct Authority, said: “It doesn’t matter the size of your pension pot – scammers are after your savings.”
COMMENT BY GUY OPPERMAN
When we think about people “being scammed”, it’s all too easy to assume it was their fault – that they should have seen it coming.
This is unfair. It ignores the sophistication of the snake oil salesmen who target pension pots to harvest, fleecing savvy savers of the retirement they deserve.
Their tactics are constantly changing and when they find something that works they are ruthless in cashing in. People need to get streetwise to the honeyed words and empty promises of these charlatans.
They are cunning, callous criminals with no regard for basic human decency and respect. Robbing someone of their retirement is nothing short of despicable.
So these conniving con-artists must be stopped. To that end, I’m sounding this clarion call to Express readers to get ahead by thinking smart and taking advice where necessary.
This Government has banned pensions cold calling and given pension trustees the power to alert savers if they smell a rat and warn them against taking money out of their pension.
But I want to create a generation of savvy savers who know what a dodgy deal looks like.
When I pick up my Express and read about another poor pensioner left penniless after their pension pot has been plundered it infuriates me.
So let’s turn the tables on these crooks. If it sounds too good to be true, it probably is – so seek advice, turn it down, and report the scammer.
Guy Opperman is Minister for Pensions