Some victims of pension scams have lost more than £1m in savings to fraudsters, figures from government agencies have shown.
Intelligence gathered by members of the multi-agency Project Bloom group, which was set up in 2012 to tackle pension scams, found on average, victims of pension scams lost £91,000 to fraudsters in 2017. But the data revealed two people had lost seven-figure sums.
The victims reported receiving cold-calls, offers of free pension reviews and promises that they would get high rates of return - all of which are key warning signs of scams.
A ban on pension cold calling came into force earlier this month and firms who break the rules could face penalties of up to £500m.
Nicola Parish, The Pension Regulator’s executive director of frontline regulation, said: "Victims of scams are often traumatised by what has happened to them and many inevitably are left questioning how they are going to afford to retire."
Ms Parish said that no matter how large someone’s pension pot was, they "must be vigilant and able to spot and avoid a scam".
The agencies said they believed "the vast majority" of people who lost their savings or pension pot did not report it to the authorities, meaning the actual losses may never be known and are likely to be much larger.
Research conducted by the Financial Conduct Authority showed 52 per cent of 45-65 year olds with a pension did not think they were likely be targeted by a pension scam. The most common reason given was that people considered themselves too savvy to be scammed (21 per cent).
But Angela Maher, managing director of Acumen Financial Partnership in Lancashire, said investors and savers needed to take a more sceptical view.
She said: "The problem is there is a very high level of acceptance as many of these fraudsters are slick operators. You have to be intelligent and do a lot of due diligence on what you are being offered."
Ms Maher said she and her associates regularly alert the regulator when their suspicions were aroused about a certain investment and other advisers should do the same.
"We try to leave no stone unturned and have a high hurdle of acceptance," said Ms Maher, but warned as market conditions deteriorated and it became more difficult to make returns, people might favour suspicious investments that seemed to offer better opportunities.
"If it seems like a fun investment – holiday homes, wine, vintage cars – you cannot put it in your pension," said Ms Maher, referencing previous scams that have been uncovered by regulators.
Instead, savers should be considering inflation-protecting investments, said Ms Maher. "Our advisers are on alert for our vulnerable clients, as should be the case with every other."
Andrew Tully, pensions technical director at Retirement Advantage, said: "The scale of pension scams, highlighted by these latest numbers, is truly shocking.