The City regulator today said that UK consumers and savers are at risk of investing inappropriately in schemes they do not fully understand in the quest to get an improved returns on their savings.
With interest rates at a record low for a while now, and savings accounts typically only giving interest rates of around 0.33% it’s becoming increasingly popular for people to search for better deals.
However, with this quest comes risk, and the Financial Conduct Authority (FCA) today said that this was leading to UK savers being increasing exposed to risks including the mis-selling of investments. In addition to this warning, the FCA also commented yet again on their concerns over pensions.
This is due to a secondary market planned to commence in April 2017 which will let UK consumers sell their existing annuity, or retirement income, for a lump sum. Inevitably this could lead to many people making risk investment choices, possibly losing their whole retirement income and pension pots.
An FCA spokesperson was quoted by the BBC as saying:
“There are several risks we need to consider, for example, the risks of mis-selling and poor value for money for consumers, particularly those with small pension pots and the risk that our interventions undermine competition or stifle market development,” the FCA said.
The in-depth report from the FCA included a long list of warnings for UK savers, borrowers, and investors. The findings found that the latest financial innovations to hit the market were offering new ways to invest, such as crowd-funding platforms, but warned that not all of these products were covered by the FCA’s regulatory remit.
“While the proportion of the market accounted for by crowd funding platforms is relatively small, it may grow and become a more significant issue, highlighting the fact that innovation can drive competition and innovation, but may also come with new risks.”
In simple terms, people could make risky investments into plans that they do not truly understand, either because they have not done their own due diligence or due to being given bad or misinformed advice by their financial advisers.
At Expert Pension Claims we have a team of specialists who can quickly help and advise you if you have made a bad investment after being given poor or unprofessional advice leading to financial losses.
Please contact our team for more information about how we could help you to claim for pensions mis-selling compensation or recompense after a high risk investment went wrong.