People educated to degree level could be more at risk of falling for a pension scam than those who have not been to university, research from regulators has found.
The findings also suggest that people falling for a pension scam could end up seeing 22 years’ worth of savings disappear into the hands of fraudsters within just 24 hours.
Those with a university degree are more likely to accept a “free pension review” from a company they have not dealt with before – and also more likely to take up the offer of early access to their pension pot than those without a degree.
Both are common scam tactics, according to the Financial Conduct Authority (FCA) and the Pensions Regulator (TPR), which jointly published the research.
One in seven (14%) people with a university degree would accept a free pension review from a company they have not dealt with before, compared with 10% of people without a degree.
And 17% with a degree would take up an offer of early access to their pension pot, versus 14% with no degree.
Two surveys of people aged 45 to 65 with a pension were carried out to make the findings, with over 2,000 people surveyed each time.
The regulators said over-confidence could also lead to savers missing the signs of a scam.
Despite nearly two-thirds (63%) of people saying they are confident making a decision about their pension, the same proportion (63%) would trust someone offering pensions advice out of the blue – a sign of a scam.
Analysis as part of the regulators’ ScamSmart campaign also found that it could typically take 22 years for a saver to build a pension pot of £82,000 – the average amount victims lost to scams in 2018.
But nearly one in four (24%) people surveyed say it would take them less than 24 hours to decide on a pension offer.
Mark Steward, executive director of enforcement and market oversight, FCA, said: “We know many people have big plans for their retirement, whether it’s seeing new places, learning new skills or helping their families out financially.
“Pension scammers destroy those dreams, often forever. So be ScamSmart.
“Reject unsolicited approaches offering ‘help’ with your pension and get advice from an FCA authorised firm before making big changes to your pension fund. Make sure your lifetime savings stay yours.”
Nicola Parish, executive director of frontline regulation, TPR, said: “Pension scammers ruin lives, stealing away decades’ of savings with professional-looking websites, ‘expert’ advice and an easy manner making it tough to spot the fraud.
“But once you sign on the dotted line, often there’s no second chance.
“Scams can happen to anyone, so before making any decision about your pension, take your time, be ScamSmart and always check who you are dealing with.”
Pension savers can test how ScamSmart they are by taking a quiz on the ScamSmart website. More information is available at www.fca.org.uk/scamsmart.
Here are four tips from the regulators to protect yourself from pension scams:
1. Reject unexpected pension offers whether made online, on social media or over the phone
2. Check who you are dealing with before changing your pension arrangements – check the FCA register or call the FCA helpline on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA.
3. Do not be rushed or pressured into making any decision about your pension.
4. Consider getting impartial information and advice.
The Pensions Advisory Service provides free independent and impartial information and guidance. If people aged 50 or over require free independent advice, they can contact the government-backed Pension Wise service. To book a free appointment, visit www.pensionwise.gov.uk/en.