Posted on: 17th April 2020
The Financial Conduct Authority (FCA), Money andService (Maps) and The Pensions Regulator (TPR) have warned savers against the increasing threat of scams (UK) during the current COVID-19 crisis.
In a recent joint statement aimed to raise the awareness of pension scams, they highlighted that scammers are likely to target the increasing levels of vulnerability stemming from the current lockdown.
Savers are urged to not rush decisions about their pension, and should instead seek the correct support service, such as the Pensions Advisory Service, ScamSmart, or an IFA.
The FCA also made it clear that those who wish to transfer their pension should check “who they are dealing with”, and to only use firms authorised by the FCA.
FCA executive director of enforcement and market oversight, Mark Steward, said: “Fraudsters will exploit the coronavirus to prey on anxiety and fear of savers and investors, especially those who may be vulnerable.
“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.”
TPR chief executive, Charles Counsell, reiterated the same message, emphasizing the fact thatremain a “safe long-term ” for . He urged savers to not make any “hasty decisions” about savings that have taken a taken “a lifetime to build”. It is important for customers to fully educate themselves on their available options first.
Additionally, the regulators emphasised that TPR was working with scheme trustees in the defined benefit space to “manage schemes’ risks” and “do all it can” to protect benefits following the recent issuance of updated COVID-19 guidance.
Industry experts have welcomed the joint statement, with former pensions minister, Steve Webb, agreeing that scammers will likely see opportunity in the crisis and attempt to “cash in on people’s anxieties”.
Webb commented: “The questions I am getting at the moment from members of the public very clearly reflect anxiety about the slump in markets and worry about the potential for further falls.
“It is vital that consumers are protected from con-merchants who sound convincing but are actually out to prey on the vulnerable. It is shocking that at a time when we need to pull together there are people who see this as an opportunity to cash in on people’s anxieties.
“Savers need to check with impartial sources of advice and guidance before making big decisions about their finances, especially in the current climate, and not be pressurised into doing something they will later regret.”
This was then reiterated by AJ Bell senior analyst, Tom Selby, who believed it to be good news that the regulator was on “the front foot” by being proactive and keeping savers informed of the dangers that their pensions could face.
Selby continued: “These dodgy schemes take many forms, from-based scams targeting investors who are starved of income to ‘early access’ pension offers aimed at those who may be struggling to make ends meet.”
He went on to say that constantly evolving methods made meaningful legislative or regulator protections difficult. He agreed that knowledge is the best tool for avoiding a potential scam.
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If you would like to protect yourself against pension scams (UK) and are considering speaking with a financial adviser, look no further than Haven IFA. We are here to ensure that not only will you make the most of your savings and investments for when you retire, but that they stay protected along the way. Get in touch to learn more about our services.