Today, regulators are urging savers to keep calm and not rush to make any decisions about their pension in response to the coronavirus (Covid-19) pandemic.
The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA), supported by The Money and Pensions Service (MaPS), say fears over the impact of the pandemic on markets and personal finances may make savers more vulnerable to scams or making a decision that could damage their long-term interests.
They are urging savers to take their time and visit the Pensions Advisory Service website for free plain English pensions guidance before making any decisions about their retirement savings. And to go to the ScamSmart website to learn how to protect themselves from pensions scams. This includes people already retired who are thinking again about their options.
The coronavirus outbreak has impacted 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, leading to additional worry for savers. It can lead to an increase in scams, as unscrupulous people try to take advantage of the 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.
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.'
Charles Counsell, TPR’s Chief Executive, 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.
'More than ever before, you should visit The Pensions Advisory Service website for impartial guidance before making any decision about your retirement or get financial advice from a Financial Conduct Authority-authorised financial adviser.'
For defined benefit pensions savers, TPR is working with trustees to manage schemes’ risks to do all it can to make sure your benefits are protected.
We all urge savers worried about their retirement savings to do 4 things:
- Visit the Pensions Advisory Service website for guidance on how coronavirus may have impacted your pensions.
- If you are aged 55 or over and considering drawing your pension, you can book a Pension Wise guidance session to fully understand your options.
- Use a financial adviser to help you make the best decision for your own personal circumstances. Make sure the firm you are dealing with is FCA-authorised, and they are permitted to provide pension advice. You can check the firm you are dealing with is authorised by visiting the FCA Register.
- Learn how to protect yourself from pensions scams by visiting the ScamSmart website.
Notes to editors
- For more information contact Dan Menhinnitt at [email protected] or 01273 349 511.
- Law enforcement, government and private sectors partners are working together to encourage members of the public to be more vigilant against fraud, particularly about sharing their financial and personal information, as criminals seek to capitalise on the COVID-19 pandemic.
- The Pensions Regulator (TPR) is determined to pursue pension fraudsters. It has recently secured custodial sentences in two criminal investigations linked to pension fraud. Patrick McLarry, of Bere Alston, Devon, a former head of a charity providing work for people with disabilities, was sentenced to five years in February for defrauding a scheme of more than £250,000. Roger Bessent, of Lytham St Annes, Lancashire was jailed for three years and four months in 2019 for fraudulently taking more than £290,000 from a pension scheme.
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund; to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
- The FCA, MaPs and TPR are members of Project Bloom. Bloom was created in 2012 and brings together government departments, agencies, regulators, law enforcement bodies and representatives of the pension industry to tackle pension scams. The other partners include the Department for Work and Pensions, HM Treasury, the Serious Fraud Office, City of London Police, the National Fraud Intelligence Bureau, Action Fraud, the Pensions Scams Industry Group, the Information Commissioner’s Office, the Insolvency Service, National Trading Standards and the National Crime Agency.