FCA research has found that a quarter of consumers would consider withdrawing pensions savings to cover cost of living in the current crisis. According to the FCA, this renders consumers vulnerable to ‘misdirection’ scam tactics.
The findings are backed up by retirement income market data which shows that the number of pension plans accessed for the first time has increased by 18% in 2021-2022 compared with 2020-2021.
Preying on money worries and lack of confidence that pension savings will last through retirement, the FCA is warning that a pattern is emerging of scammers using ‘misdirection’ tactics to con victims. The FCA compared these tactics to those used by magicians to divert attentions of the victim.
Following a survey of 1,000 people over the age of 40 with workplace and private pensions, it was found that 44% of respondents would take up the offer of a free pension review, which the FCA warns is one of these distraction tactics. Once engaged with scammers, victims are vulnerable to being scammed out of their pensions due to a lack of understanding about their pension savings.
More than half of those surveyed, 54%, said they were not confident in how to grow their pension pot. Further, 38% said they did not feel confident in their understandings of how pensions work.
One woman, Pauline Padden, received a text offering her a better deal on her pension and some cash for transferring her pot. She was promised higher returns…
