High-Risk Pension Investment Claims
Nadeem Pervazis a solicitor at Edward & Amaury Solicitors, a law firm authorised and regulated by the Solicitors Regulation Authority. Content is reviewed for legal accuracy and compliance with FCA guidance and SRA conduct standards.
TL;DR — Quick Summary
- ▸High-risk pension investment claims arise when a financial adviser placed pension funds into speculative or unregulated assets — such as overseas property, storage pods, care home bonds or mini-bonds.
- ▸These products are generally categorised as non-standard assets and are considered unsuitable for ordinary pension savers, particularly those approaching retirement.
- ▸Both the adviser who recommended the SIPP and the SIPP operator who accepted the investments may bear responsibility.
- ▸If the adviser firm has since collapsed, the FSCS may be able to compensate you. If it is still trading, the FOS is the usual first step.
- ▸Time limits apply — if you have only recently discovered losses, do not assume you are out of time before seeking advice.
If your pension was transferred into a SIPP and then invested in high-risk, alternative or unregulated assets, you may have grounds for a compensation claim. Many people were advised to move their pension savings into products that were wholly unsuitable for their circumstances.
Quick Answer
A high-risk pension investment claim arises when a financial adviser placed your pension savings into speculative or unregulated assets — such as overseas property, storage pods, care home bonds or mini-bonds — that were wholly unsuitable for an ordinary pension saver. If the adviser firm has since collapsed, the FSCS may be able to compensate you. If it is still trading, the Financial Ombudsman Service is the usual first step.
In simple terms: Pension savings are supposed to be invested prudently for your retirement. High-risk and unregulated investments — things like overseas property schemes, forestry or mini-bonds — carry a serious risk of total loss and are not appropriate for most people saving for retirement. Advisers who put ordinary savers into these products often failed their regulatory duty.
Many high-risk pension investments have resulted in significant and sometimes total losses. If your pension was invested in any of the types listed below, it is worth seeking professional advice about whether you may have a claim.
Types of High-Risk Pension Investments
Over the past decade, pension savings have been invested in a wide range of non-standard and high-risk assets, often within SIPPs. Some of the most common types include:
This list is not exhaustive. If your pension was invested in an asset that you did not fully understand or that seemed unusual, it is worth seeking advice.
Why These Investments Were Often Unsuitable
Ordinary pension savers saving for retirement typically need their funds to be invested in a way that balances growth with an appropriate level of risk, reflecting their age, income needs and financial circumstances. High-risk and unregulated investments fail this test for most people because:
- They carry a high risk of partial or total loss of capital
- They are often illiquid — meaning money cannot easily be accessed when needed
- They may be unregulated, meaning there is limited regulatory protection
- Performance is often highly speculative
- Many have been associated with fraud or collapse
- They are often completely unsuitable for cautious or moderate-risk investors
Adviser and SIPP Operator Responsibilities
Both the financial adviser who recommended the investment and, in some cases, the SIPP operator have regulatory responsibilities:
- Financial adviser: Must ensure any investment recommendation is suitable for the individual client, explain all risks clearly, and have regard to the client's circumstances and attitude to risk.
- SIPP operator: Has due diligence obligations regarding non-standard investments. An operator who accepted clearly unsuitable investments may also bear some responsibility for losses.
Your Options If You Have Lost Money
If your pension has been invested in a high-risk scheme that has failed or significantly lost value:
- If the adviser firm is still authorised, you may be able to complain to the Financial Ombudsman Service
- If the adviser firm has failed, you may be able to apply to the Financial Services Compensation Scheme
- Where other routes are unavailable, legal action against surviving parties may be an option