Beware of offers for a ‘free pension review’, say FCA

The FCA have evidence that people are being contacted unexpectedly and offered a ‘free pension review’. This could be a phone call, an email or text message or an offer in an online advert.

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

Some callers claim to represent the Government after its announcement to introduce free retirement guidance. This initiative has not been launched yet. When it is the FCA, and the Government, will provide further information.

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’ best interests are very unlikely to cold call offering their service. 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.

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

The risks

Investing in unregulated investments can be high risk. Returns can be unreliable and the investments can be difficult to sell. You could lose everything you invested, significantly reducing your retirement income.

You may also have limited protection if something goes wrong with the investment, including no right to complain to the Financial Ombudsman Service or to claim compensation from the Financial Services Compensation Scheme.

In particular, it is unlikely that the Ombudsman 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.

Always check that anyone offering you advice or other financial services is authorised by the FCA: if they are, their name should appear on their Register. More information on how to search the Register.

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 the Register to see that your adviser is authorised by the FCA 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, contact any authorised firms that were involved. The Ombudsman might be able to help if you cannot get the matter resolved with those 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.