Average savers lose £32,000 each to pension scammers and millions of retirement savers over 55 years old fall victim to the fraudsters, according to new research.
Industry watchdogs the Financial Conduct Authority says one in five over 55s were the targets of pension investment scams over the past three years, rising to one in three of over 75 year olds.
The FCA explained poor returns on savings and pension freedoms introduced in April 2015 have allowed crooks to exploit ordinary savers hoping to set aside money for a comfortable retirement.
The government agency is also disappointed that millions of pounds spent on advertising the risks of handing cash to scammers seems to have failed.
Victims don’t check out crooks
The research shows one in eight over 55s contacted by scammers did not adequately research the opportunity they were offered before handing over their savings, rising to one in four over 75s.
The most common check savers carried out was checking a fraudster’s web site (41%) and only 27% asked for a second opinion from a finance professional.
Although the average cost of major building work was £25,000 compared to the average of £36,000 spent on financial investments such as stocks or shares, more people (47%) told the FCA that they researched builders carefully and extensively, compared to those researching financial investments to the same extent (38%).
More than half (55%) investing in financial products did so on their own, rather than making the decision with family.
Over 55s suffer the most
Mark Steward, the FCA’s director of enforcement said: “Making a significant financial investment is an important decision – be prudent, do your homework and be especially on guard if contacted out of the blue by someone you don’t know. Fraudsters are targeting our growing over 55 population because they are more likely to have money to invest. They may pressure you to make a quick decision or try to make you feel stupid for not taking up their bogus offers.
“No investment decision should be rushed. Be sceptical. Be suspicious. Ask questions and get answers you can verify. And remember, if you receive an unsolicited call about an investment opportunity that sounds too good to be true then it probably is. The best thing to do is hang up.”