The Association of British Insurers has warned people to think twice before making any rash decisions about their pension during this uncertain time of the Covid-19 lockdown.
It is urging people not to see their pensions as a “quick way of raising cash” as there is growing concern people will be tempted to use the pension freedoms without thinking of the longer-term consequences.
The body has emphasised the important role financial advisers can play during this time and how they can guide people through their personal circumstances.
Regulators have also been warning investors to be extra vigilant about potential scams during the coronavirus crisis.
Referencing its research study, the ABI highlighted that even before Covid-19, many people risked running out of money in their retirement if the amount being withdrawn from pension pots continued at such a rate.
ABI director of policy, long-term savings and protection Yvonne Braun says: “Rushed financial decisions are rarely the right ones, even at this worrying and uncertain time.
“Lockdown will not last forever, but the decisions you make today about your pension could impact on your standard of living for years to come. Now, more than ever, it is important to think longer term, consider your options, and seek advice and guidance – whether from the Money and Pensions Service or a financial adviser – before making any decisions.
“And don’t fall victim to scammers – shun any unexpected approaches; and remember: if a deal seems too good to be true, it almost always is.”
Responding to the announcement The People’s Pension director of policy Gregg McClymont says: “There’s no doubt we’re living through a difficult time and for many money will be a worry. But as the ABI advises, those savers who are able to access their pension pots should take professional advice before doing so to ensure they’re making the right choice for them financially.
“For many auto-enrolment savers closer to retirement, their pension provider will have altered their investments to reduce risk for members as they come towards claiming their money. This has protected their pension savings from the worst of the market falls and should give older savers comfort that their retirement plans are still secure.”
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