New pension regulations came into force on 30 November 2021. The new regulations permit Trustees to block or suspend a suspicious-looking pension transfer if they believe that the transfer could be to a scheme that is fraudulent.
These new regulations could prove to be the most significant development in preventing pension scams.
Paul Higgins of Pension Justice, a law firm that has helped recover millions of pounds in mis-sold pensions, says: “I am delighted that the Government has brought in this new rule, and I hope that this will prevent pension scams taking place so that pension investors will not lose their life savings.
“Unfortunately, there are still hundreds of thousands of people who have previously taken their money out of pensions and handed over their life savings after being badly advised to invest in worthless, unregulated investments like carbon credits, ethical forestry, storage pods, to name but a few”.
One of Pension Justice’s clients, Mrs F from Burnley, lost her entire life savings worth over £157,000 after being persuaded by an “advisor” from Asset Management Advisory Services (AMASS) Ltd (t/a AMASS Europe) to transfer her pensions into a SIPP and “invest” in an EPS Portfolio with Avalon.
The advisor paid themselves £3,842.10 in commission and then arranged to “invest” Mrs F’s £149,000.00 in what turned out to be unregulated funds promising unrealistically high returns.
The investments subsequently failed, and Mrs F lost her entire life savings. It then transpired that the advisor and their company had minimal authorisation from the Financial Conduct Authority and were not authorised to provide advice on pensions and investments.
Pension Justice took up the case with the FSCS (Financial Services Compensation Scheme) and recovered compensation of £85,000.00 on behalf of their client which was the maximum payable under the scheme.
Paul says: “One of Mrs F’s pensions was a gold-plated defined benefit scheme pension with Proctor and Gamble. Under the new rules Proctor and Gamble could have prevented the transfer from taking place and, in which case, Mrs F would not have lost her life savings.
“Unfortunately, we know that there are still hundreds of thousands of pension investors who have lost all their pensions and are facing a miserable retirement with little or no money apart from their state pensions. Some are even being forced to carry on working way past retirement age”.
Paul and his team at Pension Justice have managed to recover sums up to £189,591.37 for his clients, many of whom have been scammed by cold callers and told that they could “double their money” or are promised potentially incredible returns if they transfer their hard-earned pension pots.