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FSA issues pension loans warning

The Financial Services Authority has warned investors to treat schemes which allow them to unlock 50 per cent of the value of their pension fund before age 55 with “extreme caution”.

The details of the warning note, revealed last week by Money Marketing, focus on the investment risks and loan charges associated with the schemes.

The regulator says the promotional material it has seen “does not state the exact level of fees or charge.” It says there is a “good chance” investors will be left with less than money than they started with.

In May, Money Marketing revealed concerns over pension loan schemes which exploit a loophole in regulations to allow people with a pension pot of £20,000 or more to borrow 50 per cent of that value from a separate occupational scheme.

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  1. I read the above article and empathise completely with what has been stated. I couldn’t agree more that there are a large majority of pension loan providers that do not provide clear and accurate information with regards to their fees and charges. However, it is never good to tarnish everybody with the same brush! Here at http://www.Pensions2Cash.co.uk we strive to introduce clients to providers that give full details of their charging structures.

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