Pension scam victims could lose an average of 22 years of savings in 24 hours, according to research by the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR).
As part of the regulators' joint ScamSmart campaign, to encourage people to protect their savings, the pair today (8 November) revealed it could take a saver 22 years to build a pension pot of £82,000. This was the average amount victims lost to scams in 2018.
Nearly one in four people (24%) surveyed admitted to taking 24 hours or less to decide on a pension offer.
Even though 63% said they were confident in deciding about their pension, the same proportion said they would trust someone offering pensions advice "out of the blue".
TPR and the FCA also found that those with a university degree were 40% more likely to accept a free pension review from a company they had not dealt with before and 21% said they were more likely to take up the offer of early access to their pension pot.
FCA executive director of enforcement and market oversight Mark Steward said pension scammers "destroy people's dreams of planning for retirement and helping families financially".
He said members must ensure they are "ScamSmart", and reject unsolicited approaches offering them help with their pension and to get advice from an FCA authorised firm before making big changes to their pension fund.
TPR executive director of frontline regulation Nicola Parish added that once members sign on the dotted line, often there is no second chance. "Scams can happen to anyone," she said.
In August, the FCA and TPR issued a warning after it was revealed that five million scheme members could be putting their retirement pots at risk to scammers.
Commenting on today's news, Aegon head of pensions Kate Smith said it is tempting to dismiss scams as something that can only happen to other people but the one thing scammers do not do, is discriminate.
She said: "Fraudsters are increasingly sophisticated and will re-invent their approach, but while it may appear that they to want to help you, their only motivation is helping themselves to your pension savings. And being caught out and losing your pension is devastating."
Meanwhile, AJ Bell senior analyst Tom Selby said: "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."
The People's Pension director of policy Gregg McClymont also noted concerns over pension scams becoming "increasingly prevelent", adding that anything that raised awareness "is to be welcomed".
He said: "The recent pension schemes bill included legislation that would give greater protection to savers, although that has been paused due to the upcoming general election.
"It is vital that policy makers move swiftly to ensure that the law is tightened in the fight against ruthless scammers and recognise that they regularly change their methods.
"We have long supported the work of the ScamSmart campaign and this most recent study by the regulators confirms how vulnerable pension savers can be."
This article originally appeared in Professional Pensions' sister title Professional Adviser
The FCA’s consultation on banning contingent charging on DB transfer advice has closed. Kim Kaveh looks at the industry’s responses.
With the law not adequately protecting savers from scams, the pensions industry must be more direct with members about the risks of transfers, says Margaret Snowdon.
The High Court must bless a settlement between British Airways (BA) and the trustees of the Airways Pension Scheme (APS) to achieve certainty and bring to an end the acrimonious six-year dispute, it has been told.
The NEST members’ panel is calling on the government to start reducing the £10,000 auto-enrolment (AE) earnings threshold, before the move to start contributions from the first pound earned.
The pension schemes bill will face yet another delay as the UK seems set to have its third general election in five years on 12 December.