The top three phrases used by pension liberation scammers to steal savers’ retirement funds have today been published by a nationwide campaign group that rescues victims of these fraudulent schemes.

The list from ACA Pension Life, which represents members of 13 dodgy schemes with total losses in excess of £2bn, comes as the organisation says an increasing number of people are falling victim to these types of scams.

ACA Pension Life’s Chairman, Angela Brooks, comments: “Every year millions of people become victims of pension scammers, many of them to skilful conmen who persuade them to ‘liberate’ their pensions.

“The majority of those who are duped by the liberation scammers lose their entire lifetime savings and then face mountainous debts plus tax demands of 55 per cent from HMRC.

“It’s with depressing inevitability that it’s our experience that more and more people have fallen victim to these sharks since the government last April introduced its pension freedoms reforms that allow over-55s to access their entire pension pots.

“It is important to inform the public on how to recognise a scam to prevent more people losing their hard earned retirement savings.”

She continues: “The scammers are constantly changing their tactics. However, according to our members, there are three key phrases that should immediately ring alarm bells if you are approached by a pension liberation firm.

“First, ‘legal loophole.’  If anyone tells you there is a ‘legal loophole’ that allows you to access part or all of your pension before the age of 55, and that there will be no tax to pay, they’re lying and you should disengage immediately.

“Second, ‘sophisticated investor.’ If anyone tells you you’re a ‘sophisticated investor’ and should be investing your pension in assets which are ‘not traditionally available,’ red flags should be hoisted.

“And third, ‘free’.  If you are told you can transfer your pension free of charge, make sure you find out exactly what the long-term charges entail.  There is no such thing as ‘free’.

“Of course, there are other tactics and warning signs, but these three phrases are amongst the most common and the most effective ways used by fraudsters to entice people into handing over their life savings.”

Angela Brooks concludes: “Every day we hear of more people whose lives have been wrecked by these scams.

“This is despite the authorities’ efforts to prevent them. There are several initiatives currently in operation including the Pension Regulator’s (tPR) Scorpion campaign, the Financial Conduct Authority’s (FCA) ScamSmart campaign, and the government’s Project Bloom.

“But clearly, they’re not nearly effective enough and the scammers are winning.”

Last month, the ACA Pension Life chairman said in a statement: “We’re calling on the government to set up an independent, specialist task force to tackle this serious and growing problem with a joined-up approach.

“Specifically, the government must insist HMRC stops registering pension schemes without doing due diligence, it must insist tPR stops registering occupational schemes without due diligence, and the FCA must look at the weakness of its regulations.

“A failure to do so will inevitably mean more lives will be ruined by pension liberation scammers.  In addition, there is an associated cost to the government of not tackling this, as those left without financial means will be reliant upon the already overstretched welfare system for many years to come.”