Pension scammers have cold-called one in eight retirement savers aged over 50 offering huge returns that fail to deliver, according to a new survey.
Tens of thousands of calls are made promising free pension reviews, pension unlocking or pension liberation, says financial firm Old Mutual Wealth.
Many scammers pose as bogus independent financial advisors.
More than two-thirds of retirement savers aged between 50 and 75 were called on the phone – a huge rise on the 56% who said they were contacted by phone last year.
The scammers offer to transfer pension pots to another pension fund or self-invested pension plan (SIPP) or sometimes to a Qualifying Recognised Overseas Pension Scheme (QROPS).
Millions of pounds at risk
In many cases, retirement savers are charged huge fees to access their cash or the money is siphoned off to dubious investments where the cash disappears overseas.
Old Mutual Wealth revealed the figures as part of an annual wide-ranging pension survey asking retirement savers about the quality of advice they receive about their money.
“Pension liberation firms promised to switch money into alternative investments that offered fantastic returns that rarely paid off,” said the Old Mutual Wealth report.
Angela Brooks, of scam watchdog Pension Life warned that pension liberation schemes were increasingly endorsed by regulated financial advisers, putting millions of pounds of savings at risk.
She highlighted that although financial advisers appear qualified and regulated, they may have questionable ethics and sometimes make recommendations that are not in the best interests of their clients.
Unethical advice
“If a financial adviser is working on commission only, then he must sell you something to get paid. Keep this in mind while dealing with financial advisers,” she says.
“Financial advisers are specialists who are trained to give advice and carry out transactions which will help people build up savings for their retirement.
As with any profession, there are good and not so good ones. There are more bad financial advisers offshore than there are in the UK because regulation is much stricter at home.”
The message is retirement savers should only entrust their wealth to a reputable and regulated adviser otherwise they are unlikely to recover any money if there are given poor advice or lose their pension funds.
Regulated IFAs are not allowed to cold-call prospective clients in the UK.
