We all think we’re savvy when it comes to people trying to con us out of our money. But it seems that confidence is misplaced when it comes to pension scams.

According to a new report from Citizens Advice, just one in ten people can spot the warning signs that fraudsters are trying to scam them out of their pension pots.

The report, titled Too Good to be True, found that 88% of people miss the common warning signs of a pension scam, including unusually high investment returns, cold calling, and offers of free financial advice.

And despite being blind to the risks, most people have a misplaced confidence in their ability to spot a scam.

Three quarters of people (76%) said they were confident they could identify a pension con – compared to the 12% that were actually able to do so when a scam was presented to them.

The research, which polled just over 2,000 adults, highlights how scammers are starting to use free pension reviews and advice as the first step towards tricking people out of their pension pots, Citizens Advice said.

The report also reveals that people are particularly at risk from phone, post and email scams that come out of the blue – with 10.9m consumers receiving unsolicited contact about their pension in the last year.

Almost two thirds of consumers (64%) said they would consider an unsolicited offer about their pension, while many said they would just look at informal sources about whether the approach is genuine.

People are at risk from phone, post and email scams that come out of the blue – with 10.9m consumers receiving unsolicited contact about their pension in the last year. Image by Kzenon/Shutterstock.com

People are at risk from phone, post and email scams that come out of the blue – with 10.9m consumers receiving unsolicited contact about their pension in the last year. Image by Kzenon/Shutterstock.com

People are at risk from phone, post and email scams that come out of the blue – with 10.9m consumers receiving unsolicited contact about their pension in the last year. Image by Kzenon/Shutterstock.com

People are at risk from phone, post and email scams that come out of the blue – with 10.9m consumers receiving unsolicited contact about their pension in the last year. Image by Kzenon/Shutterstock.com

Asked how they would check whether a pension offer was legitimate, almost half of those who would consider an unsolicited offer (45%) said they would look up a company’s website and just over a third (36%) said they would discuss with family.

Only a third of people (33%) said they would check the company is listed on the Financial Conduct Authority’s online register and is authorised to give regulated advice.

It’s difficult for consumers to stay ahead of pension scams as they evolve

Gillian Guy, chief executive, Citizens Advice
An atom of type quote lives here

In one example, Citizens Advice said it had given help to a 59-year-old man after a near miss with a pension scam.

The man was cold-called by a company offering a 'free pension review' which recommended he invest his retirement savings in Hong Kong.

He was was offered an appointment the next day but when documents were couriered to his home, he realised something was wrong and refused to sign. He’s since been helped by Citizens Advice so the company doesn’t contact him again.

Gillian Guy, chief executive of Citizens Advice, said: “Fraudsters have shifted their tactics to rob people of a retirement income.

“It’s difficult for consumers to stay ahead of pension scams as they evolve.

“Many scammers use professional looking websites and leaflets to fool their victims into signing up to free pensions advice or cold call with offers of unusually high investment returns.”

She urged consumers to check the Financial Conduct Authority’s website to make sure a company is legitimate before considering any kind of pension offer.

“If you are are worried that you may have been targeted by scammers you can get help and support from Citizens Advice.

“If you are over 50, Pension Wise guidance can equip you with the knowledge of what to look out for to avoid falling victim to scams.”