Did you see the Panorama programme shown on the BBC back in July 2016, called Pension Rip-Offs Exposed? It revealed how some people have been duped into losing their pension funds, thinking they were just taking advantage of the new rules that allow greater access to their pension.
The problem usually started with a ‘cold call’, i.e. someone ringing up out of the blue offering a ‘free pension review’. It often ended up with the pension being transferred to a scheme that sounded wonderful, but was actually too good to be true. Once transferred, the monies are potentially afforded no regulatory protection, including coverage from the Financial Services Compensation Scheme. This means that if things go wrong there is very little which can be done in terms of recourse, corrective action, and receiving any compensation for errors / mis-selling.
During 2016, an IFA friend of mine started a parliamentary petition to have the law changed to ban cold-calling and in the Autumn statement the Government pledged to tackle this.
However, just making cold-calling illegal won’t stop all the calls, and some people still risk being taken in.
You need to be aware that a reputable IFA would never simply ring you out of the blue, although many will offer a free initial review of your pensions if you ask. If you receive a cold call, there’s no need to discuss or argue, simply Hang Up.
- The Pensions Regulator booklet about how to avoid being taken in by pension scams
- 10-step guide to protecting yourself from scams
- Parliamentary petition to ban cold calling about pensions, as mentioned above
At Monetary Solutions Ltd, you can book a free initial consultation about any financial matters, so please call us on 020 8655 8488.