“Hello, have you had your pensions reviewed recently?”
If you’re older than 40 and haven’t received a phonecall you weren’t expecting about your pensions, then I’d be shocked.
It’s estimated that hundreds of thousands of such calls offering “free pension reviews” have been made by marketing companies based both in the UK and abroad to people that mostly never asked for it.
Providing the person receiving the call didn’t hang-up straight away, the caller often went on to persuade that person to let them review their pensions; to see if they could get more money for retirement elsewhere. If not, no hard feelings.
If you’re one of those people that went ahead and transferred your pension after one of these calls, you may want to read on.
SIPPs, SSASs and High-Risk investments
While these companies may well have seemed to be unbiased, offering a service that would only recommend a pension move that was in their client’s best interest, many were far from impartial.
Some marketing companies were paid big bucks to sell the idea of a pension transfer into a SIPP, and to preach the often high-promised returns of things like overseas property investments, forestry schemes, storage pods and corporate bonds.
What they didn’t always say, is that many of these investments were high risk, and not suitable for the average pension saver.
Many of these investments went on to underperform, stall or even collapse entirely, either through unavoidable changes to the market-place, or because of poor management or links to fraud.
Either way, because of their high-risk and FCA-unregulated status (the watchdog has no real power over these investments, especially those based abroad), this has left many inexperienced investors with sometimes worthless investments, in a position they can’t afford.
While some SIPP investors who have been hard-done-by this scandal of cold-calling pension movers have managed to make claims against the financial advice they received, not all have received all of their money back, having invested (and lost) more than the FSCS’s compensation cap of £50,000.
But what may be the worst bit about this scandal is, many of the people who have been mis-sold in this way are yet to realise it.
Pensions are complicated, often boring and usually far from the front of people’s minds, meaning that while this scandal has been running for around 10 years or more, little is found in the news.
Finally, mainstream news is kicking in, and cold-calling about pensions is set to be banned in the near future, giving both victims and those in the industry hope.
Until then, say no to cold-calls about your pension, and seek independent financial advice if you’re unsure.
This article was written by Tom Iveson who works for Get Claims Advice a claims specialist company he often writes about about mis-sold pensions and SIPP.