The number of pension scams has declined significantly, following government action to ban cold calls and boost the powers of trustees to stop suspicious transactions.
Research by Broadstone has found only 7 per cent of adults said they received an unsolicited phone call or email about pensions in 2022. This is significantly less than the the 20 per cent that were receiving these calls in 2017 prior to the cold call ban; and the 16 per cent who were still receiving these communications in 2020, ahead of the new powers being given to trustees.
Broadstone says this drop means that the proportion of adults reporting potentially fraudulent approach about their pension savings has fallen by 6.5m to around 3.7 million in the space of five years.
All age groups recorded significant drops but the drop was particularly sharp among 55–64-year-olds with unsolicited pension approaches dropping from 27 per cent in 2017 to 13 per cent in 2022.
This demographic is the most targeted by scammers because of their ability to access pension savings from age 55, their need to make decisions ahead of retirement and their pot is reaching its peak.
In terms of common tactics, 3 per cent said that they had received calls, emails or text messages claiming to be from the government offering retirement planning advice down from 14 per cent in 2017. A further 4 per cent said they had been offered a free pension review, half the proportion of 2017 (8 per cent), while just 2 per cent were offered the ability to ‘unlock’ their pension early (before 55), dropping by a two-thirds compared to 2017 (6 per cent).
Other scammer tactics included the chance to invest money released from a pension with very high or guaranteed returns (2 per cent), the offer of a ‘loan’, ‘saving advance’ or ‘cashback’ to take advantage of a pension deal (2 per cent), or the promise of transferring a pension to a new scheme with a guaranteed high return (1 per cent).
The government banned pension cold-calling in 2019 and introduced new rules in 2021 giving pension trustees and scheme managers new powers to stop suspicious pension transfers ending up in the hands of a fraudster.
Broadstone head of market engagement Simon Kew says: “Action from the regulator and the government appears to be making a really positive impact.”
He says this has led to a significant decrease in this type of financial fraud. But he adds: “Even just one pension scam is too many and as an industry we must remain vigilant against the actions of fraudsters. Continuing to drive public awareness about the risks of pension scams and how people can protect themselves is crucial.”
Other industry initiatives include TPR’s new strategy to combat pension scams launched last year and its Pension Scams Action Group (PSAG), formerly Project Bloom, as well as the Pension Scams Industry Group (PSIG) – the voluntary body set up to combat pension scams through the publication of good practice for trustees, providers and administrators.
