Regulators haveĀ again warned savers over the risks of scams as the cost-of-living crisis heaps pressure on strained household budgets.
Savers also urged ānot to panicā over recent headlines suggesting pensions are in ācrisisā.
Problems linked to Liability Driven Investments (LDI) had created a cashflow issue for certain defined benefit (DB) schemes and a bond selling problem for the government ā but the vast majority of peopleās pensions were never directly at risk.
Tom Selby, head of retirement policy at AJ Bell, comments:Ā āRising inflation and the spectre of recession are looming over UK households, increasing the financial vulnerability of millions of savers and retirees.
āBrits have also been exposed to weeks of headlines suggesting pensions are in ācrisisā, which inevitably caused huge unnecessary worry for lots of people.
āAll of this uncertainty will inevitably have left people more vulnerable to scams and more at risk of making poor retirement decisions, such as withdrawing their entire pension pot in one go and potentially paying thousands of pounds in unnecessary income tax asĀ aĀ result.
āThe reality was the post-mini-budget problems we witnessed, and the subsequent Bank of England intervention, were about preventingĀ aĀ ādeath spiralā in UK government bond sales, rather than there being any direct or immediate threat to peopleās pensions.
āThe hedging instruments at the heart of the crisis were held by defined benefit (DB) schemes, meaning that the majority in defined contribution (DC) schemes were not directly affected. Even in the case of DB schemes with LDI exposure, provided the employer was not at risk of going bust, their pensions should still have been secure.
āIt is vital as the dust settles on the LDI crisis that all parties involved in communicating the issue reflect on the unnecessary distress caused to people who thought their hard-earned pensions may not be safe.ā
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