With so many of us guilty of pushing our pensions to the back of our minds and concentrating on more current issues, it’s easy to lose track of retirement plans, which can leave them neglected and potentially underperforming.
This is often true of people who move jobs several times in their working life, leaving “frozen” or “deferred” pensions behind.
Of course, there are a number of financial advisers and marketing companies who are aware of this, offering ‘Free Pension Reviews’ to see if it would be a good idea for you to move and consolidate these old pensions, maybe giving you a little more bang for each retirement buck.
But hidden amongst these companies, lurk more than a few scammers.
Free Pension Reviews Are Often Biased.
Every heard that you don’t get something for nothing?
A full pension review, when completed with the care and attention it deserves, should take weeks if not months. Why would a company spend all that time on you if there wasn’t much of a chance they’d get business out of it?
In actual fact, we’ve seen thousands of cases where marketing companies were offering free pension reviews in order to peddle certain high-risk pension arrangements, for which they could earn some huge amounts in commission.
In more extreme cases, the marketing company was simply the sales and/or marketing firm of the final investment, whilst appearing at a glance to be independent and unbiased.
High Pressure Tactics
After doing all that work and with such big commissions on the line for those selling, it’s not surprising to hear that many of the mis-sold pension cases here in the UK involve some high-pressure sales tactics.
We’ve heard everything, from sales agents playing down rare and valuable “Final Salary Pensions” in favour of transferring, to “limited time offers” designed to get people to commit to a pension transfer long before they are ready or have done enough due diligence to make an informed decision.
High Pressure tactics can make an individual feel like they are stupid if they DON’T move their pension, and that’s just how some scammers want them to think.
No Accountability
While some of the marketing companies we’ve seen convince people to make an unsuitable pension transfer used a financial adviser to make it happen, others didn’t.
Unregulated marketing companies are just that: unregulated, and therefore not under the jurisdiction of the Financial Conduct Authority, which means you can’t claim against them for negligence. In some circumstances, this can lead to a claim against the new pension provider, but these are rare, leaving many people with lost pensions and no way to claim them back.
Always Seek Independent and Regulated Financial Advice
If you want to get your pension reviewed, this is where a regulated financial adviser should come in. Sure, you may have to pay a little upfront, but in that way you’re given yourself a better chance of receiving unbiased advice in your best interest.
Depending on what and where those old “frozen” pensions are, you may well have a better retirement if you leave them where they are, or perhaps there is a more suitable option out there for you. It’s a regulated adviser’s job to find out what is best for you, with their advice backed up by access to the financial ombudsman or the FSCS is they get things wrong.
This added layer of protection is not to be knocked, and by going with somebody independent and regulated, you should have minimised your chance of falling for a sophisticated pension scam, and needing somebody like us to help pick up the pieces.
Tom Iveson is the Content Manager for Get Claims Advice where he covers topics related to SIPPs and mis-sold pensions