As with all crime, methods and tactics evolve and improve all the time. Pension liberation schemes are often invested in assets which are “toxic”. This means they can be risky, illiquid, or even completely worthless. Sometimes described by the scammers as being “not traditionally available” or even presented as “attractive investment opportunities”, these so-called “investments” usually promise unrealistic gains of around 8% a year or more, and can include:
- Car parking spaces
- Store pods
- Overseas property developments
- Biofuels and carbon credits
- Care homes
Why do scammers like toxic investments?
Because they earn handsome introduction commissions – sometimes as much as 50%. A pension’s assets should be diverse, liquid and low risk. But the scammers are not concerned with the interests of the victims – only the opportunity to line their own pockets.
In recent years, many pension schemes have become worthless because what started as the promise of ‘attractive returns’ ended up as a total loss. Some value is sometimes recovered by professional pension trustees or insolvency practitioners. But this can be as low as 10p in the £.