Victims of pension fraud are being scammed of an average of £91,000, regulators have warned.
The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) are urging the public to be on their guard when receiving unsolicited offers about their pensions and to check who they are dealing with.
According to the regulators, highly sophisticated scammers lure people into transferring their pensions into fraudulent schemes. Victims of pension scams can lose their life savings, and be left facing retirement with limited income.
A total of 253 victims reported to Action Fraud that they had lost more than £23m to pension scammers in 2017, equating to an average loss of £91,000 per victim.
Nicola Parish, executive director of frontline regulation, TPR, said: "£91,000 is a huge amount of money for someone approaching their retirement to suddenly have ripped from their savings.
"If someone cold calls you about your pension, it's probably an attempt to steal your savings. Our message is clear – hang up and report it."
One of the most common tactics is to offer a "free pension review", the watchdogs warned, with cold calling by far the most common method used to initiate pension fraud.
Other scam tactics include:
:: Unexpected contact about your pension via phone, post or email
:: Promises of guaranteed high returns and downplaying the risks
:: Offering unusual or overseas investments that aren't regulated by the FCA e.g. overseas hotels, forestry, green energy schemes
:: Putting people under pressure to make a quick decision, for example with time limited offers, and sending a courier round with paperwork to sign
:: Claiming to be able to unlock money from an individual's pension (which is normally only possible from age 55)
Mark Steward, executive director of enforcement and market oversight at the FCA, said: "The size of individual pension pots makes pensions savings an attractive target for fraudsters.
"That's why we're urging anyone who is thinking about transferring their pension to check who they are dealing with and only use firms authorised by the FCA.
"Pension scams can cause victims significant harm – both financially and mentally. If you are ever in doubt about a pension offer, visit the ScamSmart website."
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Guy Opperman, minister for pensions and financial inclusion, said: "Pension scams are devastating for hardworking people and can rob them of the retirement they planned.
"I would urge savers to always exercise caution and seek independent guidance or advice before making important financial decisions."
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