People in Merseyside are being warned of 'pension schemes' which could see them lose their entire pension.
It is estimated more than 1.3 million people have been targeted by immoral financial advisors who have dished out bad advice regarding people's pensions.
These immoral advisors have persuaded many people to transfer their existing private pensions, or extremely valuable defined benefit pensions, to open what is known as a Self Invested Personal Plan (SIPP) and to “invest” in unregulated, high risk and illiquid 'investment'.
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For many, this has led to them losing most - if not all - of their hard-earned pension which they have been paying into for the majority of their working lives.
Through such schemes, past cases have seen people transfer pension pots of over £500,000 into worthless 'investments' sold to them by 'dodgy' or inexpert financial advisors who were not authorised or regulated by the Financial Conduct Authority (FCA).
Investments that promise significant returns but deliver losses have led to people losing most, and in some cases all, of their pension, leaving them devastated, often traumatised, unable to retire comfortably and often unable to retire at all.
Wirral -based Solicitor Paul Higgins of Pension Justice, a law firm that specialises in assisting victims of pension mis-selling to help recover some of their lost money, said his firm has been exposed to numerous cases where people's pensions have ended up '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’ couldn’t apply more than in the case of pension mis-selling.
"We’ve had clients that have been promised huge returns on unregulated investments into things such as storage pods, airport car parking spaces, fractional ownership of property in Cape Verde, carbon credits and more, which sadly have all turned out to be worthless."
Pension Justice has helped its clients, who have been given bad advice, to recover millions of pounds in compensation.
They have provided ECHO readers a list of the top tips to consider that could prevent people falling victim to pension mis-selling.
Pension Justice said: "Knowing what red flags to look out for could save a person from making a terrible mistake that could help them avoid losing their pension and ruining their retirement."
Be suspicious of cold calls from financial advisors
As a general rule people are advised against taking cold calls from people who introduce themselves as financial advisors.
If you don’t know who they are, put the phone down.
If you are interested in talking to them, do some background research into their qualifications and the investments they are offering.
Promises of doubling your money are probably worthless. Unfortunately, there are many unscrupulous “advisors” out there who prey on people by offering “free pension reviews”.
Under no circumstances agree to anything on the phone or invite them into your home, however convincing, how friendly they are or how much pressure they put you under.
Check with the Financial Conduct Authority to see if they are authorised to provide financial advice.
Research the investments offered
Look up pension mis-selling, discuss the investment opportunity with friends and family and ask someone to help you do some research online if you are not internet savvy.
Unregulated investments are highly risky, and you could lose your life savings for the baseless promise of high returns.
Study and understand the terms and conditions
Your financial adviser is in a position of trust and has to communicate the terms and conditions of any products they are selling.
They need to ensure you are fully informed before making any decisions.
If your pensions advisers don’t explain any terms and conditions, you will likely be able to file a claim.
Ask for a full breakdown of fees and charges
Make sure you find out exactly how much this transfer will cost you in terms of fees and annual charges.
Again, victims of mis-selling sometimes end up paying out more money to the advisor than their pension earns.
If the advisor is not clear about these fees and charges, then walk away.
Don't transfer your pension from a workplace pension
It is doubtful that it will be beneficial for you to transfer your extremely valuable defined benefit pension and there is a good chance that you will be mis-sold.
Paul added: "If you think you have already been a victim of pension mis-selling, it is possible to get compensation. Pension Justice have recently helped one client recover compensation.
"She transferred £35,000 from a defined benefit NHS Superannuation Scheme of Scotland pension into a SIPP and thereafter 'invested in an Ethical Forestry scheme; which failed.
"We recently helped another client who had a defined benefit scheme pension with Proctor and Gamble and also a personal pension which together were worth over £158,000.
"She was persuaded to open a SIPP and to transfer her pensions into that SIPP and thereafter invest over £149,000 in “investments” which subsequently failed.
"Pension Justice pursued a claim on her behalf to the FSCS (Financial Services Compensation Scheme) and in February 2020 recovered £85,000.00 in compensation for our client, the maximum payable under the scheme."
