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Hundreds of millions lost to UK pension scams

Insolvency Service wound up 24 firms in four years, with victims losing £202m in pension contributions

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Around 3,750 people across the UK have fallen victim to pension fraud since 2015, prompting the Insolvency Service to warn consumers to guard their retirement savings from scammers and negligent trustees.

The 24 companies wound up by the governmental body collected £202m ($260m, €229m) worth of contributions.

The money was lost in a number of ways, from firms advising people to invest in unregulated schemes to pension trustees not carrying out their duties.

“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,” said Kelly Tolhurst, consumer minister.

According to the Financial Conduct Authority (FCA), victims of pension scams lost, on average, £91,000 each last year.

However, both the regulator and the government are taking steps to tackle this issue, with the introduction of the ScamSmart campaign and the government banning cold-calling for pension schemes at the beginning of 2019.

Although the cold-calling ban took far longer to come into force than many had hoped.

Tragic cost of scams

“It is horrifying that thousands of retirement savers have fallen victim to cruel retirement scams in recent years” said Tom Selby, senior analyst at AJ Bell.

“Although it is good news a number of the companies involved have now been wound up, this is likely to be the tip of the iceberg when it comes to pension fraud. Some victims will be unaware they have been duped for months or even years, while others will simply be too ashamed to come forward and report what has happened.

“The government has made a start in tackling pension fraud by banning cold-calling. However, these latest figures are just another reminder of the tragic cost of retirement scams, and the protection of savers must remain front-and-centre for policymakers both in Whitehall and at regulators.”

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