New pension rules in the UK will allow people to cash in their pensions next month, prompting the Financial Conduct Authority to warn people about a host of bogus investment funds, fake financial advisers, fraudulent websites and firms.
Under George Osborne's pension reforms, people over 55 will from April 6 be able to withdraw their entire pension funds in cash.
Martin Wheatley, the chief executive of the Financial Conduct Authority, said he had "significant concerns" that hundreds of thousands of people were at risk of scams and fraud.
He said the regulator had uncovered evidence that con artists were setting up as fake financial advisers to sell people "highly speculative" investments with returns that were "too good to be true".
People should be wary of marketing messages, similar to those from payment protection insurance claims companies, and internet traps where they were asked to transfer pensions to supposedly lucrative investments.
Mr Wheatley said savers should beware of "lookalike" websites. The FCA has already closed one firm that was pretending to be the Government-backed Pensions Wise helpline, which will give savers information on the risks when accessing their pots.
"There is a big risk of fraud and scams," he said. "At a period of maximum uncertainty and change there is maximum opportunity for people to prey on people who are vulnerable as they don't know what their [different legitimate pension options] are."
He insisted that savers would have to accept responsibility if they made poor decisions after being warned against doing so by their pension provider and financial experts.
