One in five think about riskier pensions

One in five retirees has considered riskier pensions and investment products in the search for higher rates of interest, a survey has found.

Around 20% of retired people aged 55 to 75 said they had thought about such schemes, the Financial Services Compensation Scheme (FSCS) found.

The scheme said it is seeing increasing numbers of customers seeking compensation due to failed pension and investment products, or poor advice.

The FSCS, which acts as a safety net for savers if their bank goes bust, said the prolonged low interest rate environment has made it more tempting for retirees to review highinterest investment products that they would not usually consider.

People tempted by offers of high returns could end up losing lifechanging sums of money if the provider fails or investments do not perform as expected.

Many investment scams have also appeared during the coronavirus pandemic.

People can check the Financial Conduct Authority (FCA) website to make sure that a firm is authorised.

Only one in eight (12%) retirees said they had taken advice from an Independent Financial Adviser (Ifa) to see how they could make their money go further.

Although the majority (69%) of those investing said they knew all their investments were Fscsprotected, only 36% of investors knew the exact amount of FSCS protection available for their money. This means they could unknowingly be investing money in products beyond FSCS’S compensation limit, which would likely be lost if the provider went out of business.