The UK National Cyber Security Centre has warned that the outbreak of coronavirus has become the “top lure” used by online scammers to defraud people of their pensions.
And according to a survey by investment platform AJ Bell, 16% of Brits under the age of 55 with a pension would consider an offer to access their funds early to help them cope financial with the effects of covid-19.
But the figures are even more concerning for younger pension savers, since as many as 1.7 million people aged 18-34 – around 21% of those surveyed – would consider an offer to access their retirement pot early.
This compares to just 13% of people aged 35-54.
Additionally, AJ Bell discovered that younger people are more susceptible to cold-calling practices, with 15% claiming they would accept a phone call from someone they don’t know about their pension.
The figures are much lower for the other two age groups, with 11% for 35-54-year-olds and just 1% for over-55s.
There are also differences in terms of gender, the investment platform revealed, as men under 55 are around twice as likely to consider an early access pension offer than women – 21% and 11%, respectively.
‘People could lose everything’
Tom Selby, senior analyst at AJ Bell, said: “The covid-19 lockdown will inevitably push millions of people into a financially vulnerable position, with job losses, pay cuts and furloughing all potentially weighing on the nation’s finances.
“In such an environment, it is inevitable scammers will look to take advantage by attempting to coerce savers to part with their hard-earned pensions.
“A worryingly high proportion of under 55s admit they would consider an offer to access their pension early to help them get through the covid-19 crisis.
“Younger people and men appear particularly vulnerable, with a fifth of each group saying they could be tempted by a pension early access offer.
“While getting access to your pension before age 55 may be tempting during this period of uncertainty; doing so will, as a minimum, see you hit with a 55% unauthorised payment charge from HMRC in the first instance.
“At best you’ll then be subject to sky-high fees by the fraudster as well, meaning you only get a fraction of your pension back and your retirement prospects are left in tatters.
“Many people lose everything as a result of these types of scams,” he added.
AJ Bell’s survey encompassed a nationally representative study of 2,002 UK adults and was carried out by research company Opinium.
