In his 2018 Autumn Budget, Chancellor Philip Hammond announced that legislation, which was first mooted by the Government in late 2016, was imminent and finally this long-delayed ban on pension cold calling becomes law on 9 January 2019.
Why was this necessary?
For many people approaching retirement, deciding how to access the money in their pension funds in retirement can be bewildering, as the introduction of pension freedoms has meant that there are a multitude of options available.
Whilst the Government provides guidance services, the offer of a ‘free review’ resulting in someone providing a recommendation and offering to help you deal with the paperwork can be very appealing. The unfortunate reality is that many of these ‘free reviews’ have turned out to be schemes designed to invest your money in high risk, inappropriate investments or simply to steal your money outright.
Recent research by the UK financial services regulator, the Financial Conduct Authority, shows the average loss to be £91,000 - although some victims have lost much more.
A cautionary note
Whilst the introduction of this legislation will now provide a framework to prosecute offenders, it is unlikely to deter the most persistent offenders, many of whom operate from overseas.
The pensions regulator has issued an unequivocal message to any member of the public who receives an unsolicited call about their pension funds "If someone cold calls you about your pension, it’s probably an attempt to steal your savings. Our message is clear – hang up and report it".
Best practice tip
Always check who you are dealing with by accessing the FCA register to see if the individual and firm are registered to provide financial advice – if they are not listed, you won’t be protected by the Financial Services Compensation Scheme if things go wrong.
Whilst we at Savings Champion do not provide investment advice, we can help to point you in the right direction.
The Value of Financial Advice
In our view, it is important to take advice from someone who is not dependent on investing your money to earn their fee. Surely it makes sense to take advice from someone who is paid to provide you with specific financial planning, rather than for just investing your money.
If you’d like to speak to such a person, we can steer you in the right direction because over the years we have developed trusted relationships with other industry experts - including financial advisers.
☎ Or call on 0800 011 9705
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