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Savers Urged by UK Regulators Not to Rush Financial Decisions During Pandemic

Last week, the Pensions Regulator (“tPR“), the Financial Conduct Authority (“FCA“) and The Money and Pensions Service (“MaPs“) urged savers to keep calm and not rush any decisions about their pension in response to the COVID 19 pandemic.

Market volatility

 tPR, FCA and MaPs have advised that the Coronavirus outbreak has impacted many companies, including Plcs, causing market volatility. This is likely to have a damaging knock-on effect on savers’ pensions and personal finances, which could make them more vulnerable to scams or making a decision that could damage their long-term interests. Regulators have warned that there is likely to be an increase in scams as unscrupulous people try to take advantage of the situation and savers’ fears over their finances.

MaPs has acknowledged that stock market losses during this time may be hard to avoid especially where savers are looking to retire soon or have invested their retirement savings themselves. Charlotte Jackson, Head of Pensions Operations and Consumer Protection at MaPS explained that savers “may find [they have] to accept a lower income or retir[e] later.”

The FCA has advised that fraudsters will exploit the coronavirus to prey on anxiety and fear of savers and investors. They have urged anyone thinking about transferring their pension to only use firms authorised by the FCA and to reject all unexpected and unsolicited offers. Further, savers should get to know the warning signs of scams like ‘too good to be true’ high rates of returns and pressure to make a quick decision.

Charles Counsell, tPR’s Chief Executive cautioned that “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“. TtR is also working with trustees who manage defined benefit pension schemes to try and ensure benefits are protected.

 Enforcement

 Regulators have been clamping down on investment scams in recent years. tPR, FCA and MaPs are members of Project Bloom which was created in 2012 and brings together government departments, agencies, regulators, law enforcement bodies and representatives of the pension industry to tackle pension scams. Throughout the coronavirus crisis, Project Bloom will be working together to tackle any additional risks arising from the current uncertainty.

Further, tPR has recently secured custodial sentences in two criminal investigations linked to pension fraud. A former head of a charity was sentenced to five years in February for defrauding a scheme of more than £250,000, and an accountant trustee was jailed for three years and four months in 2019 for fraudulently taking over £290,000 from a pension scheme.

Support for consumers

Regulators have urged savers worried about their retirement savings to take the following four steps: visit the Pensions Advisory Service website; book a Pension Wise guidance session; use an FCA authorised financial adviser; and visit the ScamSmart website.

FCA

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About this Author

Garon Anthony, Squire Patton Boggs, litigation attorney
Partner

Garon Anthony is a partner in the Litigation Practice Group. He has specialised in dispute resolution work since he qualified as a solicitor and has considerable experience in general corporate and commercial litigation work, acting for both private and public sector clients.

Garon regularly resolves disputes for clients in the financial services/insurance sector. That encompasses professional negligence, fraud issues/recovery processes, dealing with claims and complaints by customers of the mis-selling of retail products, handling insurance policy coverage disputes for corporate...

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Sarah Neill Associate   Birmingham Commercial Litigation
Associate

Sarah Neill qualified into the Commercial Litigation team in September 2019 after completing her training contract with the firm. During her time in the team, Sarah has assisted on a wide variety of disputes, including breach of warranty, product liability, debt recovery and breach of contract. Sarah acts for a diverse client base, from individuals to PLCs.

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