There is evidence that some unscrupulous firms are using the Budget announcement about free pensions guidance to claim that they are offering a government-backed service. Some firms may also be using Sipp or SSAS schemes to transfer pensions into unregulated investments, said the FCA, after enticing people with a 'free review'.
Tracey McDermott, FCA director of enforcement and financial crime, says that people should be "very wary" if they are offered a free review out of the blue. She says that many of the firms offering these services are not authorised by the regulator and there is evidence that some reviews end in consumers having their pensions moved into unregulated investments.
She said: ""People should be very wary if they are contacted out of the blue by someone offering a 'free pension review'. Most of the companies offering this 'service' are not authorised by us, and we're concerned that the reviews often end with pension pots placed in higher-risk, unregulated investments.
Addressing consumers she said: "If you see or receive offers of 'free pension reviews', just ignore them. If you are called out of the blue to discuss your pension, just hang up. Your pension is far too important to be put in the hands of a cold-caller."
The watchdog said consumers should be wary of being offered a free pension review unexpectedly and also wary of encouragement to move their pension to get a better return.
The offers can come out of the blue in the form of an unexpected phone call, an email, text message or an online advert, said the FCA.
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Ms McDermott added: "Most of the companies making these offers are not authorised by us, though they often falsely claim they are acting on our behalf. Some claim they are acting on behalf of the Government in relation to the recently announced commitment to introduce a service to provide free guidance for people at retirement. This initiative has not been launched yet and therefore claims to be linked to it are highly unlikely to be true."
Ms McDermott said that consumers receiving these offers should ignore them. If consumers are called out of the blue to be offered a free pension review they should hang up, she said.
The FCA says that authorised financial advisers offering advice that is impartial and in their clients' interests are "highly unlikely to cold call to offer you their service and professional advice on pensions is not free."
The FCA says these so-called free "reviews" are designed to persuade consumers to move money saved in an existing personal or occupational pension to a self-invested personal pension (Sipp) or a small self-administered scheme (SSAS). The pension pot is then typically invested in unregulated investments like overseas property developments, forestry or storage units known as store pods.
The FCA also warns that people who take up the offers may have only 'limited protection' if something goes wrong with the investment when it comes to the right to complain or seek compensation.
The FCA warned consumers: "In particular, it is unlikely that the FOS or the FSCS will be able to help you if you lost money as a result of dealing with an adviser who is not authorised by us."
It urged consumers to check firms offering advice were on its register.