A number of pension and finance companies have been wound up after they were found to have “abused” millions of pounds of people’s savings.
Fast Pensions Limited and five other related firms were wound up in the High Court this week.
The court heard how between 2012 and 2013, 520 people were encouraged to transfer their pension savings from existing providers into one of 15 schemes.
FP Scheme Trustees limited was the trustee of all 15 pension schemes and a proportion of the funds in these schemes were invested in four related finance companies.
The Insolvency Service, conducting the investigation, found that at least £21 million was invested into the schemes, with some savers persuaded via cold calls “questioning the performance of their pension funds or offering free pension reviews”.
According to the report, others were told they could receive a loan if they transferred their pension into a Fast Pension scheme.
The court found that the advice provided was inadequate and the schemes on offer were misrepresented. It says advisors also failed to disclose information about returns and the high risk and illiquid nature of the investments.
A forensic analysis of the schemes also found that “at least” £4 million was used to pay commissions and the remaining funds were used to make loans to companies and other entities “which appear to be connected with Fast Pensions”.
Likewise, a lack of adequate accounting records made it “impossible for investigators to determine the full extent of the companies’ activities, the nature and value of the investments made or the value of the members’ pension funds”.
David Hope, Chief Investigator for the Insolvency Service said: “People work long and hard to put money away for their retirements but the six companies that have been shut down paid scant regard to their members. They used unsavoury tactics to attract members and failed to paint the full picture as to what would really happen with their savings.
“By shutting the companies down, the courts have put a stop to their unscrupulous activities and we hope this sends a strong message that we will robustly investigate and take action where people’s funds and savings are at risk.”
The scheme is currently under complete control of the Official Receiver who will update members on the steps taken to protect the investments and assets in the scheme.
Members of the pension schemes have been advised to speak to a solicitor.