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Pension savers warned to look out for scams during coronavirus outbreak

Joanna Faith
Written By:
Joanna Faith

Fears over the impact of coronavirus on markets and personal finances could make savers more vulnerable to pension scams, regulators have warned.

The Pensions Regulator (TPR), the Financial Conduct Authority (FCA), and the Money and Pensions Service (MaPS) are urging people not to rush into any decisions about their pension in response to the COVID-19 pandemic.

They have urged savers to contact the Pensions Advisory Service before making any decisions about their retirement savings.

The regulators said recent market volatility will be worrying for savers but can also lead to an increase in scams as unscrupulous people try to take advantage of the situation.

Charlotte Jackson, head of pensions operations and consumer protection at MaPS said: “This is a very worrying time for people. For those on the point of retiring, the impact of the virus on the financial markets and therefore on pension savings has been damaging. If you are in a workplace pension, investments are designed to deliver over the long term with measures in place to reduce the risks faced by investors as they approach retirement.

“However, if you have chosen to invest your retirement savings yourself or were looking to retire soon then you may find yourself having to accept a lower income or retiring later. The key thing is to take as much time as you can and try not to panic.

“Most importantly, before taking any major decisions relating to your pension take the time to get independent guidance or advice. You can call the Pension Advisory Service on 0800 011 3797 or make an appointment with Pension Wise by going online.”

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.”

Five tips to avoid becoming a pension scam victim from AJ Bell

  • Watch out for investment ‘opportunities’ that sound too good to be true. Schemes offering high guaranteed returns are often at the heart of pension and investment scams.
  • If you are contacted out of the blue about your pension by someone you do not know, either by phone, email, text message or on social media, do not respond.
  • Be extremely wary of anyone offering ‘free advice’, a ‘free pension review’ or ‘early access’ schemes. Advice is never free and you are not allowed to access your pension before age 55 unless you have serious health issues.
  • If you are speaking to an adviser about your pension, make sure they are regulated and check their credentials out via the FCA register.
  • Don’t be rushed or pressured into making a decision about your pension – such tactics should set off a big red warning light in your mind and are often indicative of a scam.