Scammers cost savers £202m in blow to pension pots

More than 3,000 savers have lost a combined £202m to pension scammers in recent years, whose companies were later shut down by the government.

The Insolvency Service warned investors today to guard their pension savings from investment scammers and negligent trustees, after it applied to the courts to wind up 24 companies that have carried out a form of pension misuse since 2015.

Victims of pension scams lost an average of £91,000 each to scammers, most commonly falling for ruses including cold-calls, offers of free pension reviews and promises of high rates of return.

A ban on cold-calling in relation to pensions came into force earlier this month, but analysts believe it will act as nothing more than a hindrance to scammers.

Tom Selby, analyst at AJ Bell, said it would “by no means eradicate the threat of scam activity altogether. Pensions remain a juicy target for fraudsters and some will inevitably look to circumvent the ban or simply ignore it altogether.”

“The message to retirement savers from now on is crystal clear: if someone you don’t know calls out of the blue about your retirement pot, hang up the phone.”

After the wind up of the 24 companies investigated by the Insolvency Service, eight directors have received a total of 57 years’ worth of directorship disqualifications.

In one case, four directors of companies involved in the misuse of £57m worth of pension funds were banned for a total of 34 years.

Consumer Minister Kelly Tolhurst said: “Our consumer protection regime is one of the strongest in the world and we are committed to making sure people know their rights.

“If you are approached to make an investment from your pension, always do your homework and seek independent advice, if necessary, to help you make an informed decision.

“Government continues to work closely with the Insolvency Service who are working to clamp down on rogue companies targeting vulnerable people. If you think you might have been a victim, I’d urge you to report it to Action Fraud UK at the earliest opportunity or visit the ScamSmart website for further help.”