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Warning on finance decisions during COVID-19 crisis

6 April 2020: regulators and ICAEW have called for calm over financial decision-making as the scale of the pandemic’s global economic impact becomes clearer.

Savers have been warned to be alert to scams and to avoid making hasty decisions which could damage their long-term financial interests. The warning comes from The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA), supported by The Money and Pensions Service (MaPS). 
 
The bodies say it’s easy to fear market volatility and uncertainty as the effects of the pandemic continue to play out in markets and all kinds of companies suffer. And ICAEW’s Head of Personal Financial Planning, John Gaskell, said investors must do their best to remain calm during these uncertain times.
 
The FCA explicitly warned against pension transfers prompted by coronavirus fears and anxiety and that taking time to assess your options was vital. The regulator set out four things anyone worried about their retirement savings should do:

  1. Visit the Pensions Advisory Service  for guidance on how coronavirus may have affected your pension.
  2. If you’re 55 or over and considering drawing your pension, book a Pension Wise guidance session to fully understand your options.
  3. Use an FCA-authorised financial adviser or speak to your Chartered Accountant to help you make the best decision for your own personal circumstances.
  4. Learn how to protect yourself from pensions scams by visiting the ScamSmart website. 

Gaskell said: “New investors and those nearing retirement may be especially likely to panic during volatile and uncertain times for markets. Many asset classes are affected, even those that have previously provided a safe haven or less volatile investment.  

“It is important to remember that while this is a severe shock, businesses are being offered support so as to be able to get back to their normal activities when restrictions are lifted. Therefore investments should recover. 

“Investors should remain focussed on the long term, but if they do have to make decisions during this period, consult their adviser, chartered accountant, or make the most of available guidance.”

For the latest news and guidance on the ongoing impact of COVID-19 for businesses and accountants, visit ICAEW’s dedicated coronavirus hub.