Pension reforms have created great opportunities for pensioners but also for unscrupulous individuals to exploit wealthy pensioners, Neil Lovatt has warned.
“Our concern is that freedom is not always what it is cracked up to be. There are a number of ways people might be encouraged to invest in schemes which fall outside of the protection of the FCA,” the director at Scottish Friendly said.
He warned about a new breed of salespeople, which potentially could leave thousands of people financially desolate as the government may not be able to protect those who lose their money.
Esoteric investments that could be targeted at pensioners might include a buy-to-let opportunity, buying a classic car or investing in a start-up business, he said, adding: “As there are no regulations prescribing the way in which these investments are sold, it leaves people at risk of buying into an overzealous salesperson promising the world in order to secure the sale.”
Steve Hook, private clients director at London-based Bluefin insurance brokers, said: “People looking to release their pension pots may indeed choose to invest in property, fine art or a lifetime passion such as a classic car. The consequence of these decisions need to be considered beforehand.”