Scams accounted for some 13% of the enquiries received by the UK’s Financial Conduct Authority in the most recent year for which it has records, with “advance fee fraud” the scam category the largest percentage of these enquiries – 33% of the 106,800 total queries – were about.
These and other findings were unveiled by the FCA today, in its eighth annual Data Bulletin, which noted that the total number of enquiries received by the FCA had fallen by about 10% from the same period a year earlier.
This latest Data Bulletin consists of data collated from the UK financial watchdog’s Consumer Contact Centre over the 12 months to the end of November, as well as trends drawn from the retirement income market over the six months to the end of September, the FCA said in a statement accompanying the 19-page report.
With respect to the retirement account trends, industry experts noted the effects pension freedoms were continuing to have on investor behaviour, with savers continuing to opt for drawdowns and full withdrawals in place of annuities, and too few – in their opinion – seeking advice before cashing in their pensions. (See chart, below.)
Source: Financial Conduct Authority Data Bulletin, 2017
(*UFPLS – Uncrystallised Fund Pension Lump Sum)
Although the data show more retirement account-holders are seeking advice before encashing their pension pots, the percentage of advised annuity purchases is shrinking.
In the first quarter, for example, advisers were involved in just 29% of encashments, but by the third quarter, the percentage had grown to 47%.
In total, more than half a million pots were accessed for the first time in the year to the end of October, of which the majority, 296,673, were fully encashed. Drawdowns outstripped annuities by two to one.
Among those commenting on these trends was Tom Selby, a senior analyst with AJ Bell, who noted that “the drop-off in the proportion of people seeking advice on drawdown and annuities is potentially a cause for concern, given the complex nature of the retirement decisions they are having to make”.
“The fall has been particularly stark in the annuity market, with just a third of people seeking advice before locking into a retirement income product for life in Q3 2016,” Selby added.
To read and download the latest FCA Data Bulletin from the FCA’s website, click here.