Insolvency Service issues warning after £202m of pension savings ‘misused’

Savers are being warned by the Insolvency Service to guard their pension pots from investment scammers and negligent trustees.

The government agency has warned savers to be particularly wary of cold calling, offers of free pension reviews and promises of high rates of return.

Since 2015, the service has applied to the courts to wind up 24 companies that it said have carried out a form of pension misuse, including convincing people to access their pension savings and invest in unregulated schemes, as well as pension trustees not carrying out their duties properly. Across the 24 companies, it found an estimated 3,750 victims, with £202m worth of contributions.

The Insolvency Service recommended people should seek financial guidance or advice before changing pension arrangements or making investments.

Consumer minister Kelly Tolhurst said: “Our consumer protection regime is one of the strongest in the world and we are committed to making sure people know their rights. If you are approached to make an investment from your pension, always do your homework and seek independent advice if necessary, to help you make an informed decision.

“[The] government continues to work closely with the Insolvency Service who are working to clamp down on rogue companies targeting vulnerable people.”

The Insolvency Service’s warning came after a cold-calling ban came into force to help prevent people being scammed out of their lifetime savings. It warned people must be alert as scammers can find alternative methods to steal someone’s pension.

In one case between 2012 and 2013, pension cold calls resulted in 520 people being encouraged to transfer their pension savings from existing providers into one of 15 schemes, with Fast Pensions acting as the sponsoring employer, with at least £21m being invested.

After an investigation, Fast Pensions and five other connected firms were wound up by the courts last year.

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