Warning issued about a scam that could cost you your entire pension

Merseyside residents are being warned of “pension plans” that could cause them to lose their entire pension.

It is estimated that over 1.3 million people have been targeted by immoral financial advisers who have given bad advice regarding people’s pensions.

These immoral advisers have persuaded many people to transfer their existing private pensions, or their extremely valuable defined benefit pensions, to open what is called a Self-Invested Personal Plan (SIPP) and to “invest” in ” unregulated, high risk and illiquid investments. .

READ MORE:Direct call fraud warning issued after 92-year-old nan was scammed over £ 10,000

For many, this has caused them to lose most, if not all, of their hard-earned pension to which they have contributed for most of their working lives.

Through such programs, past cases have seen people shifting pension funds of over £ 500,000 into worthless ‘investments’ which were sold to them by ‘dubious’ or inexperienced financial advisers who were not. authorized or regulated by the Financial Conduct Authority (FCA).

Investments that promise large returns but generate losses have led people to lose most, and in some cases all, of their pensions, leaving them devastated, often traumatized, unable to retire comfortably, and often unable to take their retirement at all.

Lawyer Paul Higgins of Wirral-based Pension Justice, a law firm specializing in helping victims of pension abuse sales to help them recover some of their lost money, said his firm had been exposed to many instances where people’s pensions have been found “worthless” as a result of “unregulated investments”.

Higgins said: “That old adage of ‘if it sounds too good to be true, it probably is too good to be true” could not apply any more than in the case of pension misrepresentation.

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“We have had clients who have been promised huge returns on unregulated investments in things such as storage pods, airport parking spaces, fractional ownership of property in Cape Verde, credit facilities. carbon and more, all of which unfortunately turned out to be worthless. “

Pension Justice has helped its ill-advised clients recover millions of pounds in compensation.

They provided ECHO readers with a list of the best tips to consider to prevent people from falling victim to pension abuse sales.

Pension Justice said: “Knowing what red flags to watch out for could prevent a person from making a terrible mistake that could help them avoid losing their pension and ruining their retirement.”

Beware of cold calls from financial advisers

As a general rule, people are not advised to take cold calls from people who pose as financial advisers.

If you don’t know who they are, hang up.

If you want to talk to them, research their qualifications and the investments they offer.

Promises to double your money are probably worthless. Unfortunately, there are many unscrupulous “advisers” who prey on people by offering “free pension reviews”.

Never accept anything over the phone or invite them over to your house, no matter how convincing they are, how friendly they are, or how much pressure they put on you.

Check with the Financial Conduct Authority to see if it is authorized to provide financial advice.

Research the proposed investments

Research pension plan abuse sales, discuss the investment opportunity with friends and family, and have someone help you research online if you are unfamiliar with the internet.

Unregulated investments are very risky and you could lose your savings for the baseless promise of high returns.

Study and understand the terms and conditions

Your financial advisor is in a position of trust and should communicate the terms and conditions of all the products they sell.

They need to make sure you are fully informed before making any decisions.

If your retirement advisors don’t explain the terms and conditions, you will likely be able to file a claim.

Request a full breakdown of fees and charges

Make sure you know exactly how much this transfer will cost you in terms of fees and annual charges.

Again, victims of abusive sales sometimes end up paying the advisor more money than their pension earns them.

If the advisor is not clear on these fees and charges, then walk away.

Not transfer your pension from an employer pension

Transferring your extremely valuable Defined Benefit pension is unlikely to be of any benefit to you, and there is a good chance that you will be sold poorly.

Paul added: “If you think you have ever been the victim of a pension abuse sale, it is possible to get compensation. Pension Justice recently helped a client recover compensation.

“She transferred £ 35,000 from a defined benefit pension from the NHS Superannuation Scheme of Scotland into a SIPP and subsequently” invested in an ethical forestry scheme; who failed.

“We recently assisted another client who had a defined benefit pension plan with Proctor and Gamble and also a personal pension with a total value of over £ 158,000.

“She was persuaded to open a SIPP and transfer her pensions to that SIPP and then invest over £ 149,000 in ‘investments’ which subsequently failed.

“The pension justice filed a complaint on its behalf with the FSCS (Financial Services Compensation Scheme) and in February 2020 we recovered £ 85,000.00 in compensation for our client, the maximum payable under the program. ”

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