£15,000

Average amount stolen by pension scammers

A forthcoming ban on cold-calling pension companies will now include text messages and emails, the government has said. Previously the law was going to include phone calls only.

Only two types of call will now be allowed: companies contacting existing customers about offers, and companies responding to a customer’s request for information.

If you receive any other type of call, you can confidently assume it’s a scam. Other types of cold-calling scams, such as selling mortgages, have already been banned.

Companies breaking the law face fines of £500,000, issued by the Information Commissioner’s Office. However, only companies based in the UK will be affected, so it’s likely that many will move overseas.

The law is a major crackdown on fraudsters who target savers’ retirement funds. Around 3,000 people have been scammed since 2014, losing an average of £15,000 each. Around £5m was stolen in the first five months of 2017.

Typically, scammers try to persuade savers to move their pensions into “low-risk” schemes that promise high returns. But these investment accounts are fake, and victims can lose their life savings.

Many fraudsters exploit legal changes made in 2015 which gave over-55s the freedom to spend their pension early, or move it.

Pensions minister Guy Opperman said the figures “highlight the extent to which people’s savings are being targeted and stolen through elaborate hoaxes – leaving them with little opportunity to build up their savings again”.

Pensions experts have welcomed the measures. Former pensions minister Ros Altmann said: “We will never stop such fraudsters completely, but these measures will certainly protect the public better - about time too”.

However, it’s feared that it may be many months before the ban becomes law. A spokesman for the Department for Work and Pensions (DWP) said the legislation would be tabled only “when parliamentary time allows”.