Warning of Potential ‘Goldmine’ for Pension Scammers
As a financial mis-selling specialist law firm, we are warning you to be extra vigilant over the next few months with regards to your pensions, once the new reforms come into force in April.
Whilst changes will allow you to take money from your pension savings, this can leave significant numbers of people with huge tax bills, or an increased risk of falling prey to investment scams promising significant returns.
The new pension laws do promise more freedom when it comes to pension savings. They will allow you the option of either taking money out over a period of time (meaning you will no longer have to purchase an annuity over the age of 55), or taking the money out in smaller lump sums.
However, Peter McKenna, TLW Partner and specialist in Financial Mis-Selling warns:
The new reform may benefit many people, however others looking to invest or grow their money may be put at risk of losing it all, as clever investment scams, some of which are already in operation, are designed to look like a genuine investment.
Specialising in financial mis-selling, we have seen the potential pitfalls which await those unfortunate enough to be caught up in these scams.
Pension pots which they have saved all their working lives for are lost in an instant and there is usually little hope of getting it back. If the financial adviser with whom you are talking to is not regulated by the FCA [Financial Conduct Authority] and does not have an established and proven track record we would advise people to think very carefully before taking their advice.
Our warning comes following news of several premiership footballers falling prey to clever scams, including Robbie Keane and ITV’s I’m a Celebrity Get Me Out of Here’s Jimmy Bullard. A channel 4 Dispatches documentary aired the week-commencing January 12th, also highlighted an increase in exploitative and illegal activity in the pensions and investment markets.
It is estimated that the over 55’s will have access to an estimated £100bn. We fear that it could make you a target of unregulated firms seeking to take advantage of the new freedoms.
Peter Mckenna continues:
The Government is being urged to introduce new anti-fraud measures which is a good idea, however we don’t know what measures they will introduce or – if they do – when that will come into play. The current regulatory regime isn’t strong enough so it is vital that awareness is raised to protect the people of the North East from scams, which can prove devastating to the individual.
With the Financial Ombudsman Service already dealing with massive volumes of work from other mis-selling scandals, it may be years before they are able to determine a complaint. However as experts in financial mis-selling, we can provide legal advice to protect victims and try to get justice.
Peter McKenna also urges those of you under 55 to be aware that scammers could try to catch you out too, by claiming that the new reforms offer ‘loopholes’ which they can exploit by releasing pension funds early with no adverse consequences.
Pension liberation fraud has already cost around £500 million which could become much higher if you are not fully informed of the pitfalls.
Although the current rules say that you have to be 55 to access your pension, there is little to stop under 55s to take it out sooner. However, what many are unaware of is that 55% tax would be taken by HMRC.
If you fall victim to a ‘pension liberation’ scam then potentially, not only would you lose your savings, you would also still be liable to pay that huge tax bill on the monies accessed to HMRC as well.
If a deal seems too good to be true, then it probably is. If anyone is in any doubt about anything they’ve been told, we would recommend seeking specialist advice from an established, FCA-regulated advisor before making any financial decisions.
For further information or free impartial advice, please contact firstname.lastname@example.org
or call 0191 293 1500. Alternatively, you can make an enquiry using our online form.