- Self Invested Personal Pension (SIPP): Often set up to hold high risk, illiquid, underperforming alternative investments, with higher charging structures.
- Final Salary transfer: With in-built guarantees it is rarely suitable to transfer this type of pension to any other form of Pension product or provider.
- Small Self-administered Scheme (SSAS): Used in the same way as SIPP’s, and often set up in a contrived fashion to hold the same type of products.
- Occupational Pension Scheme (OPS): Often set up by unregulated entities to circumnavigate the regulated (advice) process.
When interest rates dropped, alternative investments were sought (and aggressively promoted) to assist in building up pension (and cash) funds to achieve the desired capital growth and/or level of income in retirement. With high commissions and associated risk, such investments have often fallen well short of delivering on promises made. To be fair, some have fallen foul of unforeseen political and/or tourism changes, where the orchestrators have not intended to lose investors’ money. However, others have been constructed using convoluted, engineered business models, designed to attract investor funds into a company/structure, where the investor has little control, nor assets to secure their investment, often resulting in extreme, or even total loss.
More concerning is that people have been encouraged to invest in such high-risk products, by raising money on their residential properties. In extreme cases, people in their late seventies/early eighties have been talked into raising funds, even utilising ‘equity release mortgages’ to do so.
For more information, please refer to the Pension and Mortgage sections, which you will find on the home page of this website.