The Financial Conduct Authority (FCA) is urging retirees to take the necessary precautions before making investments, in a bid to help combat widespread investment fraud.
The sustained period of low interest rates has seen over 55s indicate that they are adopting riskier investment behaviour, with 4 in 10 having moved money out of savings and into investments in a bid to get a better rate of return.
23% said that they are considering investing in unfamiliar types of investments in the next 12 months. Those considering investing in unregulated products in the next 12 months indicated that they would invest an average of over £4,000, with land, wine and art as popular investment choices.
While over a quarter have chosen to invest in unregulated investment products, 13% were unaware that unregulated products bought through an unauthorised firm offered no protection from the Financial Ombudsman Service or Financial Services Compensation Scheme, if things go wrong.
Despite the risks, nearly half of those investing in unregulated products through unauthorised firms do so without getting professional advice or checking publicly available investor information. Over a quarter (27%) of those who have fallen victim to investment fraud did so having bought an unregulated product through an unauthorised firm.