Retirement savers need better protection from unsuitable investments in self-invested personal pensions (SiPPS), according to some advisers.
They are calling for the Financial Services Authority to tighten up rules on suitable holdings within a SiPPS because some advisers are recommending risky or expensive investments.
Financial advisers blame pension trustees for failing to keep a tight control of investments within their schemes.
However, trustees do not give investment advice and either accept the retirement saver is managing their own finances or has sought advice from an IFA.
The FSA and other regulatory bodies have recently warned about fraudsters encouraging pension savers to put money in to bio-fuel companies, unregulated collective investment scheme structured products and life insurance.
The Serious Fraud Office (SFO) has been investigating an alleged bio-fuel scam offered through more than a dozen SiPP providers which has cost up to 2,000 retirement savers around £40 million.
The scam is not really the result of any underlying with SiPPs, but a well-organised rip-off that foiled due diligence.
SiPPs remain popular with hands-on investors who want to manage their own retirement savings, especially with the advent of ease of access to funds through online platforms.
The pensions are not always the right self-investment wrapper for expats or international workers with UK pension rights
The alternative for them is a Qualifying Recognised Overseas Pension Schemes or QROPS for short.
A QROPS offers many of the advantages of a SiPPs, but also has more flexible investment and currency options.
From a tax standpoint, UK non-residents also lose any pension relief on SiPP contributions, which offers another financial benefit for considering a QROPS.
The first questions for an expat considering whether to invest in a SiPP or QROPS is tax residence.
If the expat is a UK tax resident, then a SiPPs is the most suitable option. QROPS are not available to people who intend to stay in the UK.
If the expat is a non-resident and intends to live outside the UK permanently, then switching to a QROPS may offer better investment and tax flexibility.
