TPR, FCA and Maps issue joint scams warning to pension savers

The Pensions Regulator (TPR), Financial Conduct Authority (FCA) and the Money and Pensions Service (Maps) have issued a joint warning to pension savers amid concerns that recent headlines could leave savers vulnerable to scams.

The organisations, all of which are members of the Pension Scams Action Group, warned that fears about the economy, such as recent extreme movements in gilt yields, could prompt savers to make rushed decisions about their finances.

However, despite the recent headlines about pension liquidity issues, TPR executive director of frontline regulation and Pension Scams Action Group spokesperson, Nicola Parish, reassured savers that "pension schemes are not at risk of collapse".

"It’s vital that savers who have seen recent headlines over the economy don’t panic and rush a decision over their retirement savings," she stated.

“Scammers exploit uncertainty. And savers’ worries about their finances may make them more vulnerable to fraudsters’ common tactics. Scammers may pose as people or organisations savers trust. They may contact savers out-of-the blue to make promises that appear too good to be true – because they are.

“We urge all savers to avoid hasty decisions and contact MoneyHelper for free, impartial guidance before taking any action. Savers can also find more information on how to spot the warning signs and check that they are dealing with a legitimate firm by visiting FCA’s ScamSmart website.”

Pension scheme trustees have also been called on to remain vigilant to the risk of scams and suspicious transfer requests, and to follow best practice in protecting savers from scams, including warning savers of the heightened risk of pension scams in times of uncertainty and providing some of the common signs of a scam.

Pensions Minister Laura Trott said: “We’re committed to arming savers with the tools they need to spot duplicitous fraudsters, who can be articulate, appear financially knowledgeable, and offer time-limited deals – all designed to convince people to hand over their hard-earned pension savings.

“As scammers’ crooked techniques evolve, so must our defences, and we continue to work closely with partners across industry, regulators and law enforcement to send scammers packing.

"Savers can also get on the front foot themselves – knowing the common signs of a pension scam is a great way to start.”

Although the organisations clarified that there is not yet evidence of an increase in pension scams, they explained that they wanted to act now given concern over cost-of-living increases and interest rate rises, which could leavers more vulnerable to "crooks set on exploiting their fears".

Indeed, the FCA recently warned that rising costs could leave savers vulnerable to scams, after its research revealed that 25 per cent of savers would consider withdrawing money from their pension earlier than planned to cover the cost of living.

In addition to this, research from Scottish Widows recently found that over a quarter (28 per cent) of Brits with a pension are worried about falling victim to a pension scam, while more than one in ten (13 per cent) have already been targeted.

Industry experts have also echoed the warning to savers, with Crowe UK partner and head of forensic services, Jim Gee, stating that "fraud always increases as we go in to a recession and pension savers need to be particularly careful at the moment".

Adding to this, AJ Bell head of retirement policy, Tom Selby, argued it is "vital" following the LDI issues that "all parties involved in communicating the issue reflect on the unnecessary distress caused to people who thought their hard-earned pensions may not be safe".

"Rising inflation and the spectre of recession are looming over UK households, increasing the financial vulnerability of millions of savers and retirees," he continued.

"Brits have also been exposed to weeks of headlines suggesting pensions are in ‘crisis’, which inevitably caused huge unnecessary worry for lots of people.

“All of this uncertainty will inevitably have left people more vulnerable to scams and more at risk of making poor retirement decisions, such as withdrawing their entire pension pot in one go and potentially paying thousands of pounds in unnecessary income tax as a result."

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