Thousands of British pensioners are facing financial ruin just four weeks into the new Pension Schemes Act.
Rash decisions and poor advice are threatening the long-term security of individuals suddenly given the power to control their own private pension pots.
Experts at Greyfriars Asset Management LLP, one of the UK’s leading wealth management companies, have seen pension enquiries rise by a staggering 50% since the pensions freedoms launch and have been inundated with calls from desperate savers who fear they have made rash decisions.
Horror stories are emerging already of life savings being swindled or individuals now facing the prospect of huge tax bills – because they acted without fully understanding the implications of their actions.
Gareth Roberts, Partner and Head of Advice at Greyfriars Asset Management LLP said: “Our worst fears appear to be coming true. We are just four weeks into pensions freedoms and already we have been privy to horror stories of life savings being lost in the blink of an eye.”
“The industry warned savers to be calm, the FCA and Pension Wise urged caution and yet every day rash choices, a failure to explore options and uninformed decisions are resulting in serious harm. Tragically for too many, once the decision has been made, it is too late to go back and life savings are gone, or locked into products that are simply unsuitable.”
“Gaining professional advice can save clients money in the long-term. Simply using online information doesn’t cut it, we encourage individuals to think carefully about getting the best chance to use pensions wisely as it can be done. This is all encompassing, without the right knowledge, people are susceptible to getting stung heavily on tax, we’ve already seen it first hand.“
“We support the objective of the pension freedoms and believe this allows for pensioners to maximise their savings, however many will make the wrong, often irrecoverable decisions about their retirement which will result in poor outcomes without the right advice”
The pension freedoms were introduced on April 6th, 2015 by the Chancellor of the Exchequer, George Osborne, in response to calls to outlaw or axe annuities.
Mr Osborne, said: “This government believes in the principle of freedom. Individuals who have worked hard and saved responsibly throughout their adult life should be trusted to make their own decisions with their pension savings.”
“I believe that people should be free to make their own choice about how to use their savings. These reforms create more choices for individuals, and we want people to equipped and ready to make informed decisions.”
But critics suggested that the new freedoms could cause confusion with some experts fearing up to £6 billion could be withdrawn in the first four months, whilst a Channel 4 ‘Dispatches’ report suggested more than half of Over 55’s quizzed had vowed to withdraw all, or some, of their money immediately.
Mr Roberts, added: “Pension freedoms brings greater choice and opportunity but with so many options it is far easier for individuals to make costly mistakes. Hence it is crucial to seek professional advice. Over 50% of people planning to retire will do so without any advice on how to best maximise their pension and the consequences could leave many in serious financial harm in later years.”
Greyfriars, part of the Best International Group of Companies, are responsible for managing more than £600 million of assets and have a team of pension experts, who have advised clients on more than £175 million of funds and been at the forefront of UK retirement advice for the past 25 years.
Pension freedoms is the most radical change to private pensions in almost 100 years and leaves individuals with the choice to decide what they wish to do with their own pension pot. With a variety of tax implications and concern about the ability to provide income for pensioners in later life, it has never been more important to seek proper advice – coupled with the fear of scammers and criminals poised to target those pensioners with access to new found wealth.
FCA Chief Executive Martin Wheatley issued a warning to the National Association of Pension Funds ahead of the introduction of Pension Freedoms about the risk of potential criminal activity.
He said: “There is rightly, a broad and important responsibility here on the FCA to protect consumers across the arc of adulthood: from first contribution to final pension payment.”
“One of the most important risks is the possibility that some customers in this first tranche to benefit from the new freedoms, will be targeted by criminal enterprise. Scams and fraud, we know, tend to proliferate at the moment of maximum uncertainty.”
That advice was echoed by the Citizens Advice just four weeks after the April 6th launch of Freedom and Choice, as they released a report including details of one retiree having lost £200,000, with a further 150 reported cases.
Mr Roberts, added: “With our help, retirees can enjoy their retirement and really benefit from the new pension freedoms. In many ways, pension structures should now be viewed as a family wealth trust and therefore could be designed to pass significant wealth down the generations, rather than simply eroded as a vehicle for retirement income or long-term care costs.”
NOTES TO EDITOR:
Greyfriars Asset Management LLP: Part of the Best International Group of Companies, Greyfriars Asset Management (GAM) is a Wealth Management company encompassing three specialist divisions, Discretionary Fund Management, SIPP/SSAS and Independent Financial Advice. With a history build predominantly on trust, Greyfriars’ expertise in the financial services arena spans some 26-years since its inception in 1989. Since that time, Greyfriars has grown and developed their services to become a reputable and leading wealth management specialist in Leicestershire. With a strong reputation in the industry, the company now manages over £600 million in assets, along with a rising client base. Very few other financial Services organisations in the UK can provide the comprehensive service that is available with Greyfriars Asset Management.
Best International Group of Companies: The Best International Group of Companies is a leading asset and wealth management group, specialising in a range of products and services. Conceived in 2009 by co-founders Brad Lincoln and Jeff Hankin, the Best International Group of Companies have successfully built key businesses (Greyfriars Asset Management, Best Asset Management, Best Travel Services and Best Onyx) in sectors ranging from Wealth Management, Asset Management, Independent Financial Advice, Funds, Investments, Leisure and Property, Specialist Entrepreneurial Growth Management Services and Travel all under one umbrella.
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