We can protect savers by working together

We’re all getting used to reduced freedom in the fight against COVID-19.

Social distancing has severely limited how we travel, relax and manage the day-to-day essentials.

We know the measures are there to protect us, the NHS, our friends, family and communities. And we know the risks of flouting them.

Being informed and risk aware is especially important in a world turned on its head – and that’s no different for pensions.

Pensions remain a safe long-term investment for retirement.

But fluctuating stock markets caused by COVID-19 could lead to pension savers making a rushed decision that they come to regret.

Disastrous consequences

As people worry about the pandemic’s impact on their pensions and investments, scammers are also looking for an opportunity to strike.

We and other regulators have acted by issuing guidance focussing on the heightened risk of members being targeted by scammers during the pandemic.


The pandemic may mean trustees need more time for transfer requests. This may be because they need to reassess how transfers are calculated or because they need to prioritise making pension and bereavement payments.

I want to reassure trustees of defined benefit schemes they’ll have the time they need to deal with cash equivalent transfer value (CETV) requests, whether because they need to reassess how transfers are calculated or because they need to prioritise pension and bereavement payments.

We’ve said we won’t act in the next three months against trustees who suspend CETV quotations and payments to give them time to review CETV terms and/or assess the administrative impact of any increase in demand.

The Pensions Ombudsman has said it will take TPR’s COVID-19 guidance, and the impact of the coronavirus generally, into account when determining whether trustees took reasonable action.

We also joined with the Financial Conduct Authority (FCA) and the Money and Pensions Service to urge savers to stay calm and not rush any financial decisions.

Now industry must step up and protect savers using every possible means.

Retirement risks

Trustees are already required to provide information and retirement risk warnings to help defined contribution (DC) savers understand the risks on the retirement options they have available to them. This is more than just a regulatory requirement.  It is about responsible stewardship and safeguarding savers at a time when they need it most.

For pension providers, the FCA has made it clear in updated guidance published recently that when savers are looking to access their DC pensions pot, pension providers are required to:

  1. Highlight the free and impartial pensions guidance offered by Pension Wise, including telephone appointments and online information.
  2. Encourage clients to take regulated advice to understand their retirement options.
  3. Ask questions to identify any increased risks associated with how the saver has decided to access their pension funds.
  4. Provide appropriate warnings of the risks and implications of their chosen option.

In these exceptional circumstances, the FCA has also provided some example questions that can be asked which may help illustrate to savers the risks in the current climate.

Avoid regrets

I urge all providers, and trustees too, to use the FCA’s guidance for firms on pensions and retirement income to help savers avoid making a choice they long regret.

Highlighting the warning signs of fraudsters and encouraging savers to be ScamSmart has never been more crucial.

Providers and trustees are the first line of defence in protecting savers from pension scams. They also have a key role to play in ensuring savers make informed choices.

Our easements and the FCA’s guidance should allow providers and trustees to concentrate on the matters that matter most, like protecting people’s pensions.

So, our message to savers is crystal clear – avoid hasty decisions about cash that’s taken a lifetime to build. And to trustees and providers, we urge you to get behind this vital message.

Charles Counsell

By Charles Counsell
Chief Executive