The Financial Conduct Authority (FCA) and the Pensions Regulator (PR) have joined forces and started an advertising campaign to highlight the dangers of pension liberation scheme and pension scams.
In the press, social media and new TV adverts their ScamSmart campaign highlights the different lifestyles of the victims of scams who lose their savings and find their retirement dreams shattered, compared with the life of scammers living it up in luxury on the proceeds of their crimes.
The average amount of funds lost to scammers is an amazing figure of £91,000. It is unimaginable the feelings someone has when they find out the promised investment scheme turns out to be a scam and their life savings gone without a trace.
Victims of scams are lured into all kinds of spurious investments such as car parking plots in Dubai, Amazonia forest products, crypto currency, self-storage units and foreign property developments to mention a few. Many scams promise rates of return well above normal market returns.
- A total of 253 victims reported to Action Fraud that they had lost more than £23m to pension scammers in 2017
- This equates to an average loss of £91,000 per victim1
Scammers are targeting those over 40 and enticing them to transfer pension assets into pension accounts that then make investments into spurious schemes promising high returns. Those over 55 who can use pension freedoms to access their funds, can find that they are encouraged to withdraw all the funds and use the cash to invest in ‘something better than a pension’, only to find the cash disappears along with the advisor!
At Jelf, we advocate that employers take active steps in helping employees getting close to retirement be given the information and training on how to manage their retirement savings properly. This would include knowing the options available from the new Pension Freedoms to support their income needs in retirement but also, very importantly, understanding how to check if the advisor they are dealing with is genuine, registered with the FCA and that the company they work for is an established and trusted advisory business in the UK.Sources: 1. Action Fraud