On the go: Regulators have issued a warning that rising levels of vulnerability caused by the Covid-19 lockdown could see more savers targeted by scammers, as concerns about finances increase.
The Pensions Regulator, the Financial Conduct Authority, and the Money and Pensions Service have teamed up to urge savers not to make any rash decisions about their pensions in response to the Covid-19 crisis.
The regulators said that fears over the current state of the financial markets and household income could make pension savers more vulnerable to scams, as fraudsters lure vulnerable people in with ‘early access’ pension offers.
Coronavirus-based investment scams have already been reported to Action Fraud, with scammers encouraging people to take advantage of the Covid-19 downturn.
Individuals have been warned to check the company they are dealing with is authorised, and should walk away from ‘too-good-to-be-true’ offers, as well as any contact from out of the blue.
The regulators told savers to visit The Pensions Advisory Service website for guidance before making any decisions about their retirement savings. They should also visit the ScamSmart website to learn how to protect themselves from pensions scams, including those who have already retired and are thinking again about their options.
The FCA stated the coronavirus outbreak has had an impact on all kinds of companies, including those listed on the stock market.
As a result, markets have been volatile and are likely to remain so for a while. This can have an impact on pensions, causing additional worry for savers, which could see fraudsters trying to take advantage of this situation.
Throughout this period, TPR, the FCA, MaPS and government departments will be working together to tackle any additional risks arising from the current uncertainty.
Charles Counsell, chief executive of TPR, told people to hold off any pension transfers that they could regret at a later date, especially those from a defined benefit scheme.
He said: “Pensions remain a safe long-term investment for your retirement and it’s important to avoid hasty decisions about cash that’s taken a lifetime to build.
“We urge you not to transfer your pension into another arrangement now and regret the decision later. If you’re worried about your pension savings, take the time to understand what options you have available. There is no need to rush.
“For those who have a final salary pension, staying in your existing scheme is still likely to be the best long-term arrangement. All savers should be very cautious about making changes at this time.”
