Dalriada News

John Griffin

Featured Article

Opportunity Knocks …

… for the unscrupulous “financial adviser”.  Hughie Green may mean nothing to today’s younger generation (my grandpa told me about him) but his clap-o-meter would have been off the scale at the almost rapturous reception given to the Chancellor earlier this year when he announced significant changes to what could be done with retirement savings.

The changes, due to be introduced in less than six months, will mean that people who retire will not be required to buy an annuity.  Instead, the proceeds of their retirement pots can be used for anything the retiree wants, with the first 25% being tax-free.

In theory, and in an ideal world, this is good news for prospective pensioners; but our world is far from ideal.  Recently published research from Fidelity suggests that more than one in eight people over age 50 have already been approached by scamsters and fraudsters who have told them, for example, that they can access their funds before age 55, or that they can get more than 25% of their fund tax-free.

One of the problems may be that many people have only a vague idea of what the changes may mean; some hear “immediate access”, “tax-free” etc and come up with their own conclusions.  When they then discover it’s not so straightforward, this provides an opportunity for rogue “advisers” to become involved, and promise people full access to their “own money”.

One thing for sure is that fraudulent advisers will continue to try to part individuals from their retirement pots, after their initial, generous, offers of “free reviews”.  Anyone who is considering taking advice should check the credentials of those providing the advice; the Financial Services Register will provide details of those individuals qualified to advise on pension planning, and the Financial Conduct Authority has details of companies registered with it.

The over-riding message must be that those who intend to make use of the new rules should exercise appropriate caution.   George Osborne’s changes were, I’m sure, well-intentioned, but it was another conservative politician, an American Ambassador, Clare Boothe Luce, who coined the phrase: No Good Deed Goes Unpunished.  We must hope, and do what we can, to ensure that it is not the unwary retirees who suffer the punishment.