Tricked into being part of a pensions scam

Geoff is aged 56 and has two company pensions that he has been paying into for 30 years. He is looking forward to his retirement. Now he can access his pension more flexibly, he’s been thinking about how to spend his money – he wants to help his daughter with a deposit for a flat and is hoping he’ll have a bit left to do up his house and maybe upgrade his car.

His friend mentions an investment opportunity he’s bought into, where he got 30% of the value of his pension pot upfront, plus promises of good annual investment returns. Geoff’s interested and agrees to have a chat with Chris, his friend’s financial adviser. Chris explains that he just needs to sign a document saying he wants to transfer his pension into another scheme, and the money will then get invested in a hotel complex in an up-and-coming tourist region overseas.

Geoff has a read of the brochure Chris gives him and checks out the website, both of which look very credible – they’ve got government logos and mention the Financial Conduct Authority. He knows he has to act quickly as the offer expires in a couple of days so decides to go for it. You only live once.

Within a couple of hours, a courier comes round with some papers to sign. Geoff has a quick look through and notices that they say he is now a company director and trustee of his pension scheme. He’s a bit confused by that but assumes it’s probably all fine, and the courier’s waiting, so he signs on the dotted line.

Geoff gets some of his cash upfront and spends it on home improvements. He wants to know when he can get the rest of the lump sum, so he tries to call Chris to find out. The line is disconnected, so he searches online and is unable to find any contact details for Chris or his firm.

After several months of trying to locate Chris and the missing money, Geoff calls The Pensions Advisory Service for advice. It quickly becomes apparent that he has probably lost all his pension savings. By signing the papers and becoming a company director, he has also taken on new legal duties with Companies House and HMRC that he didn’t know about. This leads to HMRC fining him for tax-related offences. Now Geoff can’t help his daughter buy a flat, and he’ll have to keep working for far longer than he’d planned so he can pay back his fine. All his savings are gone.

Source: the above story is reproduced with permission from The Pension Regulator’s publication “Scammed out of his retirement – don’t be next”. The story is based on real cases.