Pensions  

Regulators warn on increasing pension scams

Regulators warn on increasing pension scams

The Financial Conduct Authority and other regulators are warning that rising levels of vulnerability caused by the coronavirus lockdown could see more savers targeted by scammers as concerns about finances increase.

The FCA has teamed up with the Pensions Regulator and the Money and Pensions Service to urge savers to not make any rash decisions about their pension in response to the Covid-19 crisis.

The regulators said 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 current downturn.

People have been warned to check the firm 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 have told savers to visit the Pensions Advisory Service website for guidance before making any decisions about their retirement savings. 

Savers 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 said 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.

Mark Steward, FCA’s executive director of enforcement and market oversight, said: “Fraudsters will exploit the coronavirus to prey on anxiety and fear of savers and investors, especially those who may be vulnerable. 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.

“Reject all unexpected and unsolicited offers; get to know the warning signs of scams, like high rates of return which sound too good to be true, so-called special offers or pressure to make a quick decision and check our tips and advice on our ScamSmart website.”

Meanwhile, Charles Counsell, chief executive of TPR, has told people to hold off on any pension transfers which 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.