Financial regulators are urging UK savers to stay calm and not rush to make any decisions about their pensions in response to the coronavirus pandemic.

The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA), supported by The Money and Pensions Service (MaPS), suggested that fears over the impact of the crisis on markets and personal finances may make savers more vulnerable to scams, or to making a decision that could damage their long-term interests.

The FCA suggested the coronavirus outbreak had impacted on all kinds of companies – including those listed on the stock market – and that as a result, markets have been volatile and likely to remain so for a while.

Throughout the period of the Covid-19 pandemic, the TPR, FCA, and MaPS, as well as several government departments, have indicated they will be working together to tackle any additional risks arising from the current uncertainty.

“This is a very worrying time for people,” head of pensions operations and consumer protection at MaPS, Charlotte Jackson, commented.

“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.”

FCA executive director of enforcement and market oversight, Mark Steward, suggested that fraudsters will exploit the coronavirus to “prey on anxiety and fear” of vulnerable savers and investors.

“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,” Steward said.

“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.”

TPR chief executive, Charles Counsell, added: “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.”

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