Although it may be too late for many unfortunate victims, we were delighted to read that The Serious Fraud Office is investigating some of the firms behind so called pension liberation scams (1).
Since 2011 it’s thought that more than 1,000 people moved some or all of their pension savings into schemes such as Capita Oak and Henley Retirement with investors losing at least £120m. The SFO have also confirmed they are investigating the Westminster Pension Scheme and the Trafalgar Multi Asset Fund. The SFO are being assisted by the National Crime Agency, the Pensions Regulator and the Spanish authorities (2).
Potential investors were offered lucrative investments including opportunities in Spanish based storage pods. They were told that pods would be purchased and rented out on their behalf; this was to generate returns of 8% in the first two years, with up to 12% in future years (3). Other opportunities offered included property loans and investments in Mauritius and Florida (4).
The SFO say that many people were persuaded to withdraw savings from final-salary schemes, where their money would have been safe, and generated healthy returns. With many more people likely to have suffered, the FCA has asked anyone who believes they may have been a victim of a scam to get in touch and complete a questionnaire on the FCA website (1).
Kate Smith, head of pensions at Aegon spoke about the risks of unregulated investments “The SFO investigation into storage pod investment schemes is a timely reminder that unregulated unusual investments at home or aboard come with a high risk that people could lose all their hard-earned pension and other savings,”
“Savers must be on their guard. Promises of high returns or financial inducements are often scams and people falling for this type of investment scam run the risk of their lifetime’s savings being lost in a matter of seconds.” (4)
The number of people at risk to pension scammers is likely to have increased since 2015 and the introduction of pension freedoms. It is now much easier for those aged over 55 to withdraw money from pension funds. (3)
We would advise anyone concerned about an unusual investment opportunity to ensure that the company is registered with the FCA and also to use the FCA scam centre to research the opportunity. http://scamsmart.fca.org.uk/warninglist/
The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.