Fears arise over pension mis-selling
12/02/2015
The pension reforms being introduced in the UK in April will lead to an abundance of mis-selling claims, according to an announcement from Scottish Friendly.
Scottish Friendly, a savings and ISA provider, believe large numbers of pensioners will be targeted by salespeople with the only aim to separate them from their life savings. They believe more needs to be done to ensure pensioners and their savings are protected from a “wave of mis-selling”.
Scottish Friendly believe mis-selling is almost inevitable, and peoples pension assets may go on to be used outside the confines of the protection currently given by the FCA.
This announcement comes after a report from Metlife which claimed one in ten pensioners have already been the target of fraudsters.
The buy-to-let market is seen as a area of particular concern, as people with substantial pension funds may be encouraged to withdraw them, possibly on poor tax terms, to invest in a buy-to-let property or put down a substantial deposit on a mortgaged buy-to-let property.
Neil Lovatt, product director at Scottish Friendly, said:
“Short of a politically unacceptable U-turn on the policy, we need the FCA to take a more definitive stance to present strong negative risk warnings about using pension benefits for unregulated investments or doing so without detailed personal advice from a qualified financial adviser. Its predecessor, the Financial Services Authority did so in the past with precipice bonds and the structured capital at risk product regulations, albeit after the horse had bolted.
“We need strong and brave action from the FCA to close the gate whilst the horse is still in the stable. Doing so now can help to protect those in retirement so they can safely enjoy the freedom and flexibility the reforms were designed to allow.”
Need financial Advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
BT pension fund setback
BT, the UK telecoms giant, was today informed by the telecoms regulator that there is no obvious reason why the company should be allowed to increase wholesale charges in order to help plug the gap in the company's pension scheme. The company had hoped that the regulator would look favourably upon the request to increase wholesale charges which would have helped to pay down the £9 billion pension...
Read MoreHas Alistair Darling given himself a pensions headache?
While it was most definitely not there intention it looks as though the UK government have given themselves a potential pensions headache in the future with the announcement of the 45% tax band to come in around 2011. The new tax band is unlikely to raise significant income for the Treasury, current estimates suggest around £5 billion a year, but if as expected many high earners decide to increas...
Read MoreOccupational pension schemes have been a major success
Data released by the Office for National Statistics show that occupational pension schemes have significantly reduced poverty in the UK since the early 1990s. However, there were other interesting statistics issued by the Office today which include the fact that the top 20% of earners in the UK earn four times that of the bottom 20% of earners in the UK. This difference between the rich and the po...
Read MoreAmerican Express suspends contributions to UK pension scheme
In a move which many people hope will not be replicated across the UK business sector, American Express has today announced that company contributions into the UK final salary pension scheme have been suspended. The U.S.-based giant has, like so many other financial companies, suffered during the recession and confirmed plans to stop matching employee contributions for the next 18 months, somethin...
Read MoreForces to work Longer for Smaller Pension
The armed forces will have to work for an extra two years and will then receive a smaller pension after leaving their post, the MoD has announced. This comes after a new retirement scheme was unveiled, where Defence Secretary, Phillip Hammond admitted: “While change is never easy, we have to ensure that Service pensions are affordable, sustainable and fair”. Troops would only qualify for a...
Read More