It would seem that the pension freedoms introduced last year are making it increasingly easier for unregulated investment schemes to target the over 55s.
It is reported that, since the new rules were announced, nearly 5 million people over the age of 55 have paid into unregulated investment schemes that are basically doomed to fail.
Those taking advantage of this will normally be selling high-risk investments, such as land, diamonds and wine, which are specifically aimed at older savers with new flexible access to their pension funds. Of these schemes, 75% will lose money, and the odds of getting any kind of return are pretty slim. The risks are extremely high that all of the money will be lost, and investors will also be subjected to “secret fees” of up to 20% that they conveniently forget to advise you of.
Although not all unregulated investments are based on scams, the majority of them will be unsuitable for investors such as us, not only because of the reasons given above but also because they are not insured by the FSCS, meaning you have no comeback if you lose your entire savings. In contrast, regulated investments are insured by the FSCS up to £50,000 per investment fund.
Stay alert and be sensible; the main thing to keep in mind is that if it sounds too good to be true, then it probably is. And if you are still not sure, then let us know.