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UK pensions industry to crack down on rogue financial advisors
| Published: | 4 Mar at 6 PM |
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In a bid to curb pension liberation scams by rogue advisors, the mainstream financial services industry is forming a trade body to regulate QROPS, SIPPS and SaSS transfers.
Made up of lawyers, trustees, trade bodies and providers, the new Pension Liberation Industry Group is to issue a set of standards intended to regulate switches between occupational pensions. The initiative has received the UK Pension Minister’s approval.
The industry-wide code of conduct aims to establish fraud-free pension transfer practices, with the group headed up by chair of the Pensions Administration Standards Association Margaret Snowdon. Five requirements will be mandatory for members, including easy identification by members of the public looking for pension transfer advice.
Time limit for transfers will be set, and receiving schemes will need to submit evidence that the destination of the funds is bona fide. It's hoped that transparent communications, a discharge process, transfer tracking and the group’s membership logo will all give confidence to prospective clients.
According to Snowdon, the industry’s decision to set its own standards was spurred by the increasing number of ‘pension liberation’ cases, and will hopefully help to initiate changes in the law aimed at protecting customers from scams. In addition, Pensions Regulator Victoria Holmes is working with HM Revenue and Customs as well as the police to hit out at the sector’s pension predators.
Rogue pension liberation firms offer to unlock cash for retirement savers under 55 years of age, and are charging as much as 30 per cent of the amount withdrawn. HMRC regards the practice as unauthorised, and imposes 55 per cent tax on the entire amount, leaving those unintentionally caught out with a huge hole in their pension savings.
Holmes told the media there seems to be no way ,excepting a toughening of the law regarding pension transfers, to stop the predators taking advantage of retirement savers. She welcomes the industry initiative as part of a cooperative effort to flush out scammers and protect the public.
Made up of lawyers, trustees, trade bodies and providers, the new Pension Liberation Industry Group is to issue a set of standards intended to regulate switches between occupational pensions. The initiative has received the UK Pension Minister’s approval.
The industry-wide code of conduct aims to establish fraud-free pension transfer practices, with the group headed up by chair of the Pensions Administration Standards Association Margaret Snowdon. Five requirements will be mandatory for members, including easy identification by members of the public looking for pension transfer advice.
Time limit for transfers will be set, and receiving schemes will need to submit evidence that the destination of the funds is bona fide. It's hoped that transparent communications, a discharge process, transfer tracking and the group’s membership logo will all give confidence to prospective clients.
According to Snowdon, the industry’s decision to set its own standards was spurred by the increasing number of ‘pension liberation’ cases, and will hopefully help to initiate changes in the law aimed at protecting customers from scams. In addition, Pensions Regulator Victoria Holmes is working with HM Revenue and Customs as well as the police to hit out at the sector’s pension predators.
Rogue pension liberation firms offer to unlock cash for retirement savers under 55 years of age, and are charging as much as 30 per cent of the amount withdrawn. HMRC regards the practice as unauthorised, and imposes 55 per cent tax on the entire amount, leaving those unintentionally caught out with a huge hole in their pension savings.
Holmes told the media there seems to be no way ,excepting a toughening of the law regarding pension transfers, to stop the predators taking advantage of retirement savers. She welcomes the industry initiative as part of a cooperative effort to flush out scammers and protect the public.
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