Opperman urges savers not to make 'knee-jerk' pension decisions

Savers should not rush into making rash changes to their pensions amid the current crisis, and should instead continue to seek advice and guidance, Pensions Minister Guy Opperman has warned.

The minister highlighted that market volatility and changes to savers’ employment status, both of which are prevalent in the current crisis, are scenarios often used to try and trick people into transferring their pension into a fraudulent scheme.

Opperman stated: “I understand that many people will be concerned about the effect the coronavirus pandemic may be having on their future finances.

“But I want to urge savers to stay calm and avoid making any knee-jerk changes to their investments or pensions.

“Although there are callous crooks who will be trying to take advantage of anxious savers, there are trusted organisations that are able to help advise you."

“So if you are considering making changes,” he explained, “please seek advice from authorised firms or advisers, or guidance from appropriate organisations to ensure you’re not putting your retirement at risk.”

The message echoes a joint statement published by the Financial Conduct Authority (FCA), The Pensions Regulator (TPR) and the Money and Pensions Service (MaPs) earlier this month, which warned of an increasing threat of Covid-19 related pension scams.

Both the minister and the joint statement from the regulatory bodies urged savers to make the most of services offered by The Pensions Advisory Service and Pensions Wise.

Money and Pensions Service (Maps) head of pensions operations and consumer protection, Charlotte Jackson, added: “This is a very worrying time for everyone, and the impact of the coronavirus on financial markets is adding to the stress.

“Difficult as it is, the most important thing is not to panic or rush into making any decisions about your pension at the moment.”

The minister has also provided a number of ‘top tips’ to help savers avoid pension scams in addition to stressing the need for guidance and advice.

These included being wary of any ‘get rich quick’ schemes, which the minister emphasised were often “too good to be true”, as well as highlighting the need to use a FCA-authorised adviser and the support offered by the ScamSmart site.

The minister also reiterated the need to remember that pensions remain a “relatively safe long-term investment", and that despite volatility, members should be wary of making changes “in a panic”.

The message from the minister is the latest in a series of regulatory and industry warnings over the increased threat of scams, with TPR recently reiterating the need for the industry to protect members, and the Association of British Insurers warning against a "pensions panic".

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