Key workers being targeted by pension transfer scammers – APJ

There has been an uptick in the number of key workers being targeted by scammers to transfer their pensions into high-risk self-invested personal pensions (Sipps), APJ Solicitors has said.

The law firm revealed that is has been contacted by an increased number of NHS staff and other key workers who have been convinced to transfer their pensions and lose thousands of pounds in the process.

It noted that the NHS defined benefit (DB) scheme is “one of the best pension schemes in the country” but, with the promise of financial gain, unruly advisers are convincing some workers to move their savings into high-risk Sipps.

“We have seen an increased number of clients coming to us to access redress for their lost pension investments into high-risk Sipps,” said APJ Solicitors pension and investment claims manager, Aaron Grayson.

“We are devastated to see that advisers and scammers are using these hard times to convince our key workers to move their secured pensions into a high-risk investment, simply for their own financial gain.

“What many are not aware of is that once you have transferred out of your NHS DB scheme it is extremely rare to be able to get back in.”

People have been particularly vulnerable to pension scams during the coronavirus pandemic, with scammers seeming to find it easier to convince those who are uncertain about their finances to transfer their savings into risky investments.

The Financial Conduct Authority (FCA) has recently been taking steps to combat poor DB pension transfer advice, including a ban on contingent charging due to begin in October 2020.

Alongside rule changes on transfer advice, more than 700 firms have relinquished their DB transfer permissions after intervention from the FCA.

The regulator found that 69 per cent of DB transfer advice had resulted in a recommendation to transfer between April 2015 and September 2018, significantly higher than it expected due to FCA’s view that transferring is not in most consumers’ best interests.

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