Pensions take to our screens as BBC Panorama puts its spotlight on exploitative providers
Monday night’s BBC Panorama documentary focussed its undercover investigation on how unscrupulous pension providers are exploiting the new rules in order to gain access to employee’s savings.
Since the new pension cash changes came into force over a year ago – which allow people who have saved for a pension to do what they want with their money – a growing number of unregulated companies are taking advantage of these freedoms by encouraging savers to invest their money unwisely.
The new legislation means that people who are retiring no longer have to buy an annuity to provide a fixed, regular income. Instead, they can do whatever they want with 100% of their pension pot.
Though the reforms were hailed in principle, pension experts did warn about how they would operate in practice.
Now it seems these initial concerns have been brought into full fruition. Undercover footage from “Panorama: Pension Rip Off’s Exposed” (BBC One, 9pm, Monday 11th July) shows one unregulated consultant giving free advice and suggesting high risk investments to an unsuspecting client.
Panorama’s undercover team shot footage of call centre staff from this particular company trying to sign people up to free face to face consultations. During training for this, they are told to lie to the customers they are calling and that their overarching aim is to get “everyone to invest in Cape Verde” (an emerging tourist destination off the North West coast of Africa) – rather than carry out the proper pension review the customer thinks they are getting.
Though the Government and The Pensions Regulator are doing all they can to regulate pension providers, since the new rules came into effect their methods of control have evidently not been 100% effective.
Our advice would be to proceed with caution. If you’re a business owner looking to find a suitable provider for your Auto Enrolment scheme, or a pensioner worried about where to invest your newly freed pension pot, then please do choose wisely. Your best bet is always to use a trusted, regulated FCA registered IFA or provider, either through a referral or through a website such as unbiased.co.uk.
IEP Financial Ltd are experts in both workplace and personal pensions. Please give our Hove office a call on 01273 208813 in order to speak to one of our Independent Financial Advisors.
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