The Financial Conduct Authority (FCA) and the Money and Pensions Service (MaPS) have expressed worry about the increased dangers of pension transfers following recent redundancies at P&O Ferries.
Transferring out of a defined benefit pension scheme, according to the FCA and TPR, is unlikely to be in most people’s best interests.
In a jointly signed letter the regulators said: “In these times of financial uncertainty, we are asking you to be very careful. Since the coronavirus outbreak began, stock markets have fallen and are likely to go up and down for some time. However, your pension remains a safe, long-term investment for your retirement, and transferring it is a serious decision so please do not do anything in haste.”
Current and former P&O employees seeking financial advice should first check if the adviser is listed on the FCA’s register and offers services such as “advising on pension transfers and pension opt-outs.” On its website, the FCA provides information on what to expect when seeking counsel. On its ScamSmart pages, savers may learn how to recognise and prevent pension scams.
The FCA supervises pension transfer advice and has taken considerable action against firms that have failed to meet the high standards of advice and behaviour expected of financial advisers. The FCA is reminding individuals who provide pension transfer advice that they should begin by assuming that a transfer is unlikely to be in most people’s best interests.
In order to protect savers, TPR is in talks with the trustees of the associated pension plans. The trustees have been required to write a combined letter from the FCA, TPR, and MaPS to any savers who request a cash equivalent transfer value, advising them of the risks of transferring.
