Company combining pensions - what's the catch?

Steviebeadmill

I've been approached by a Company, not a well known pension Company in itself, that offers to perform a free evaluation of whether I should combine my pensions. What's the catch?

Aegis

The catch is that there are a number of companies out there at the moment cold calling and offering such reviews. What they then do is take your funds, transfer them into a SIPP and use the SIPP to invest into some wacky scheme with huge commissions and almost no chance of success. If you're unlucky enough to be successfully targeted by such a firm, you could lose everything you've saved so far in your pension.

There's no absolute guarantee that this is such a company, but if you haven't asked them to call you, this is far more typical of a scamming company than a legitimate one.

Consolidation can be useful under certain circumstances, but by no means all. If in doubt, find a local IFA instead of dealing with anyone who cold calls you.