Pensions are a precious financial source for many in the UK who are facing a long and expensive retirement. Unfortunately, pension pots are a common target of scammers who can empty accounts by promising too good to be true offers. Often these scams focus on moving assets into risky investments which are completely inappropriate.
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Recent research from the litigation firm APJ Solicitors has found that cold calling scams have been costing victims millions across the UK.
This particular scam focuses on unscrupulous advisors contacting retirees to pressure them to move their pensions into high risk schemes.
Risky investments, by law, must be fully explained and analysed before it can be sold to anyone but the scammers here do not provide said warnings.
By analysing the data available, APJ Solicitors have shed light on how big of a problem this has become.
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Scammers target victims through cold calling methods (Image: GETTY)
Many of these scammers will promote a dubious investment without revealing how risky it is (Image: GETTY)
This scam has affected over 50 percent of British people earning between £20,000 to £40,000 per year.
On average, British people have lost £155,000 to these cold callers.
In some extreme cases, more than £500,000 has been lost in mis-sold pension scams.
Unfortunately, it is people who will soon really need retirement income that are targeted most often.
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The average age of the victims of this scam is between 50 and 60, the age at which many people will start looking at their pensions for income.
The scam itself follows a relatively simple formula.
The victims were cold-called and offered free pension reviews.
Once the scammer got the information they needed, they would convince the victim to move money into highly risky schemes. Examples include “ethical forestry” and “storage pods”.
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The data analysed revealed that this scam has been more successful in certain parts of the UK.
It is unclear why this is the case, but the biggest target area for mis-selling scams comes from the South East/West of England.
Scams here make up 34 percent of the total.Following this, the North West of England makes up the second largest portion of 13.7 percent.
The East Midlands is also not far behind, hitting 10.1 percent. State efforts to curb this problem appear to show limited success in light of these figures.
Many people have lost huge chunks of their retirement savings (Image: GETTY)
In January 2019, the government implemented a ban on cold calling for UK-based pensions firms, which continues to be policed by the Information Commissioner’s Office, to help prevent the British public from being mis-led or pressured into risky investments via an unscheduled cold call.
Andrea Murray, a compliance solicitor for APJ, commented on this: “The statistics and figures are worrying but not completely surprising.
“We must remember the ban doesn’t stop overseas firms – or firms based abroad with UK footprints – contacting people out of the blue.
“Many of these firms push QROPS (Qualified Recognised Overseas Pension Scheme), which are overseas SIPPS (Self Invested Personal Pensions), and can be equally as risky.”