Protect your pension pot

Protect your pension pot

Find out why you need to be wary if you are offered a ‘free pension review’ unexpectedly and encouraged to move your pension to ‘get better returns’.

We have evidence that people are being contacted out of the blue and offered a ‘free pension review’. This may be an unexpected phone call, an email, text message or an online advert.

Most of the companies making these offers are not authorised by us, though they often falsely claim they are acting on our behalf.

Some claim they are acting on behalf of the Government in relation to the recently announced commitment to introduce a service to provide free guidance for people at retirement.  This initiative has not been launched yet and therefore claims to be linked to it are highly unlikely to be true.

Ignore these offers

If you see or receive offers of ‘free pension reviews’, just ignore them. If you are called out of the blue to discuss your pension, just hang up.

Authorised financial advisers offering advice that is impartial and in their clients’ interests are highly unlikely to cold call to offer you their service and professional advice on pensions is not free.

These “reviews” are designed to persuade you to move money saved in your existing personal or occupational pension to a self-invested personal pension (SIPP) or a small self-administered scheme (SSAS). The pension pot is then typically invested in unregulated investments like overseas property developments, forestry or storage units known as store pods.

The risks

Investing in unregulated investments can be high risk. Returns can be unreliable, the investments can be difficult to sell and you could lose everything you invested, significantly reducing how much you will have to live on in retirement.

You may also have limited protection if something goes wrong with the investment. Depending on circumstances, you may have no right to complain to the Financial Ombudsman Service (FOS) or to claim compensation from the Financial Services Compensation Scheme (FSCS).

In particular, it is unlikely that the FOS or the FSCS will be able to help you if you lost money as a result of dealing with an adviser who is not authorised by us.

Always check that anyone offering you advice or other financial services is authorised by us: if they are, their name should appear on our Register. [For more information on how to search our Register, click here.]

What you should do next

If you are considering reviewing your pension arrangements, get independent advice from an authorised financial adviser.  you should also check our Register to see that your adviser is authorised by us and permitted to give advice on pensions.

Make sure you understand how these investments work, the risks involved and what they mean for you. Your adviser should consider whether they are suitable for you. For most individual investors, investing your pension money in unregulated investments is unlikely to be in your best interests. All investment alternatives should be considered and leaving your pension pot where it is may be the best decision.

If you have already moved your pension pot and have concerns, you should firstly take the matter up with any authorised firms that were involved. The Financial Ombudsman Service might be able to assist if you cannot get the matter resolved with the authorised firms.

More information about protecting yourself – including what to do if you are, or have been, approached by an unauthorised firm.                         

You can also see more information and guidance about pensions from the Money Advice Service and The Pensions Advisory Service.

Once the Government’s initiative is launched to provide guidance for people at retirement, we will provide further information on this topic.  In the meantime, be wary of discussing your finances with people who have contacted you out of the blue.