We have quite rightly been extolling the benefits that the new pension freedom rules will give everyone and the planning opportunities they create.
Something we haven’t really talked about is the risk associated with these freedoms.
I am not talking about the rather crude example of lots of retirees driving around in Lamborghinis either.
We don’t tend to go around issuing warnings about big bad companies looking to exploit unsuspecting members of the public, but in this case we will because the outcome is irreversible in most cases.
The research was carried out by Phoenix into the number of people who had been contacted by so called ‘pension liberation’ companies since the Chancellors announcement.
Of 2000 people interviewed, 42% had been contacted by one of these companies offering them access to their pension’s, this figure was only 15% prior to the announcement.
The more startling figure was that 1 in 10 18-34 years olds had already accessed some or their entire pension as a result of one of these calls.
Not only are most of these companies operating outside of the rules but also they are charging up to 30% in some cases for the privilege.
This is simply not acceptable and under no circumstances should anyone engage with one of these firms.
Something else we are seeing more and more of, unfortunately, is people being contact directly and invited to invest their pension fund in some weird and wonderful property scheme, usually abroad, offering wonderfully high returns.
We only need look to what is going on with the Harlequin Group to see how that can end for clients.
We would encourage you to be vigilant and please pass this onto your clients, friends and colleagues.
If anyone is contacted by any of these companies please speak to us before making any decisions.
Top 5 things a Financial Adviser can help you with
Why let someone else help you manage your finances when you could just ‘do it yourself’? The best way to find out is by asking the people that have one. And that’s why we asked our clients and made a list of the top 5 things they said we helped them with.Read more