The safest way of making any long-term investments such as a pension is to spread the investment across a portfolio of low to medium risk stocks and shares. Most financial advisors will gauge your aversion to risk and make their recommendations accordingly.
Before the government’s tax reforms of 2015, money paid into pensions was locked away until you reached your retirement age. You then got access to your lump sum when you were then expected to buy an annuity to give yourself a regular monthly income throughout your retirement years.
After this tax reform, you could then take your money and do whatever you wished with it.
How fraudsters took advantage of tax reform
Unfortunately, there is a flip side to everything and, in this case, it was fraudsters who spotted an opportunity. SIPPs were seen as a genuine, sensible option for investing pension funds and, if the advice given was a mixture of low and medium risk investment, this worked out well for most people.
But fraudsters quickly caught on and began promising high returns on investments into SIPPs that were based on single high-risk investments. The high-risk element was of course downplayed. One of the lesser-known but nonetheless infamous mis-sold SIPPS schemes is something known as mis-sold storage pods investing.
What is the storage pods pension scam
Storage pods are what they sound like – containers that people use for storing their belongings. The basic idea sounds plausible. You purchase storage containers or pods. They are then rented out, and the returns your investment makes are based on the money received for rentals. Buyers are also told that they can sell their storage pods on for a profit. It all sounds good in principle.
Investors are told by so-called introducer firms that they will receive a guaranteed income on their storage pod SIPPs; say 8% in the first two years, rising to 10% thereafter. This type of promise is fraudulent and is a prime example of the mis-sold storage pods fiasco.
56-year-old retired factory worker loses £34,000
The people who mis-sell these types of SIPPs are very believable. In April this year, inews published an article about a 56-year-old factory worker, Robert McCarthy, who lost £34,000 after being convinced to invest his life savings into a storage pod SIPP.
He was but one of many who had been lured by the promise of high returns but who instead ended up losing their life savings. Mr McCarthy’s example is just the tip of the iceberg.
You can read more about what to do if you’ve been mis sold Store First Storage Pods on our other posts.
It’s so easy to be caught out by this type of unscrupulous misrepresentation. But if you believe you’ve been duped in a mis-sold storage pods scam, there may be a way out. To find out more, contact us here at Pension Justice on 0800 014 8275, for a free, no-obligation chat.