By Angela Brooks of Pension Life
SPAIN has seen its fair share of disasters – from wildfires and floods to power cuts and the Covid crisis. But there’s another epidemic quietly destroying lives across the country, and it’s been festering for more than fifteen years.
An epidemic of pension and investment fraud has swept through Spain’s expat community, stealing millions from unsuspecting Brits. And while the Olive Press has long sounded the alarm, few others have dared lift the lid on this murky industry.
According to the UK’s Office for National Statistics, more than four million British citizens live abroad – with almost 10% in Spain. That makes the country a goldmine for the international pension-fraud cartels. Their goal? To lure expats into shifting their pensions and savings out of the UK and into dodgy offshore jurisdictions such as Malta, the Isle of Man and Gibraltar.
And things are about to get worse. With the current Labour government hiking taxes, the fraudsters are out in force – blitzing social media with slick ads claiming:
“…over £19 billion in UK pensions remain poorly managed…”
“…living in Spain? You could be missing out on valuable pension options…”
“…discover how to transfer and protect your pension abroad…”
The pitch is always the same: higher growth, lower tax, easy money. And it’s always a lie.
The chiringuitos financieros
There are more than 70 brokers operating in Spain right now – all promising expats financial freedom. The reality? Most of them are unregulated, operating illegally and without any licence to offer pension or investment advice.
Spain’s investment watchdog, the CNMV, even has a special name for them – chiringuitos financieros – literally “finance bar flies”.
The CNMV has published clear warnings about these fraudsters, outlining how they reel in victims through cold calls, social media, slick websites and fake ‘free pension reviews’:
Who falls victim?
Anyone living abroad can become a target, but British expats are especially at risk. Their pensions are easy to move, easy to manipulate – and easy to steal.
There are two main types of victims:
- Those already defrauded – people who’ve lost all or part of their pensions.
The Continental Wealth Management scandal is one of the worst. Around 1,000 victims were persuaded to transfer their pensions to Malta (mainly via Momentum and STM). The money was funnelled into insurance bonds in the Isle of Man and Ireland, then into toxic, high-risk investments. The result? Devastating losses and ruined retirements. - Those who haven’t yet been conned – but soon will be if they don’t wise up fast.
Why do they do it?
It’s all about secret commissions.
Fraudsters make nothing if your pension stays safely in the UK. But once they convince you to transfer it abroad, they gain control – and the cash starts flowing their way.
They earn two layers of hidden commission, both concealed from the investor and quietly deducted from their savings.
First comes the kickback for the insurance bond itself – often up to 7%. Then comes a second, fatter slice from the “investments” they stuff inside it – chosen not for performance, but for how much they pay the broker.
The more you lose, the more they make.
How to stay safe
• Use only qualified, regulated advisers – ideally members of the EFPA (European Financial Planning Association
• Never let anyone move your pension into an insurance bond (such as Utmost or RL360)
• Never transfer your pension to Malta, the Isle of Man or Gibraltar
• Ignore “free pension review” offers
• Treat all promises of “lower tax” and “higher returns” as red flags
In future columns, Pension Life will reveal CNMV-backed advice on how to protect your life savings – plus a step-by-step guide to finding the right adviser and learning the hard lessons from the Continental Wealth scandal.
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