Was Your Pension Invested in Burial Plots? If So, You Can Claim Compensation

When the pension rules were relaxed in 2015, allowing people to invest or spend their pension however they saw fit, SIPP (self-invested personal pension) investments skyrocketed. Unfortunately, so did pension scams. One of the most prevalent was the sale of burial plots in the UK.

Many UK pension customers have lost money after investing in burial plot schemes. Compensation claims can be made, but they aren’t straight forward – it will depend on the initial advice you were given and whether it can be argued it was bad advice.

The proposals may have promised big returns, but the truth seems to be far from that.

Read on to learn more about burial plot investments to see if you have fallen foul of a pension fraud.

Looking for other information on Pension fraud? This guide has info on 'Pension invested in Burial plots fraud' We have also writen extensively about:

• - Pension invested in Cap Verde fraud
• - What is the pension ombudsman?
• - Is Mis-Sold pension compensation taxable?
• - What is the FSCS compensation scheme?

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Burial Plot Investments

In 2010 the UK population was booming, and news began to spread that burial plots were suddenly scarce. More people were dying than could be buried, and so more cemeteries had to be built, and quickly. Of course, with higher demand comes higher prices, and so grave sites were increasing in price by hundreds of pounds.

Or were they? Because that’s what people were being told as they were asked to invest their money in burial plots. Promises of big returns as plots were sold at a premium were made to entice people to invest their hard-earned money, with SIPP plans offering the easiest freedom for people to choose how they wanted to invest.

The issue is that many of these schemes were mis-sold, based on some factual evidence but not the complete story. By using some facts, salesman were gaining customers’ trust. But this just led to more money being lost.

For example, one of the most prominent hooks used by sellers of burial plot investments was that the growing Muslim population was potential for bigger returns, and that’s because Muslims prefer to be buried rather than cremated once they have passed away. This is factually correct.

The argument was therefore made that burial plots were scarce in some areas of the country with a high Muslim population. Again, still true. But then the salesman would say this meant that plots were being sold at a much-inflated price, and this is the lie – they may be trying to sell plots at a price that’s double what it may have cost before, but in reality, the market price of burial plots had barely risen at all and was often much lower than the valuation given by the salesman or the financial advisor.

Inflated Price Plots Are Left Unsold

Therefore these inflated price plots are left unsold, controlled by a dodgy market of scammers who can hold onto them at no cost to themselves while failing to give the promised return to the original investors.

Suddenly you have people investing tens of thousands of pounds on the promise that they could see a 40% return on investment (a claim made by a firm named Creative Investors when they sold burial plots) when actually plots are being sold at a similar price to what they were before, and maintenance costs could be eating up any marginal profits.

Indeed some plots were being sold even below market value. That’s because, as Regional Memorial director Kamran Saleem said, “no one wants their loved one to be the first on a new, empty site”. The market isn’t there for these new expensive plots, but people have already committed their money.

Failed Burial Plot Investment Schemes

There have been a number of failed burial plot investment schemes. The most famous name is the Walsall Burial Plot group, but these investments have cropped up across the country and have been sold by a wide number of less reputable pension advisors and salesman. They’re unregulated, which means if you do invest, you aren’t protected by the Financial Conduct Authority and are therefore at risk of losing all of your funds.

If managed correctly, the burial plot investment could have been a huge success for all involved. In 2010 The Guardian was reporting on the burial plot crisis, with the situation in London declared “critical”.

However, due to the mis-selling of investment schemes by those looking to make quick money, instead of a well-maintained market with reasonable growth customers are instead losing thousands, tied up in unsellable expensive plots of land.

The Future of Burial Plot Investments

For the last few years, cremation vs burial percentages have remained fairly steady. Around 75% of people who die are cremated, while 25% of people are buried. But while the percentages are steady, the number of people dying is rising – from 500,000 per year now to an expected 590,000 in 20 years’ time.

That’s 90,000 more people dying in 2040, or to put it another way, an extra 22,500 people that will want to be buried – a total of 147,500 each year.

So, the demand for burial plots will continue to rise, which means they could be a wise investment choice in future. However, right now, the market is still a mess, and it will take some sorting out before it becomes a solid opportunity for anyone looking to invest their SIPP. With prices high, you should wait for evidence that your investment will be valued appropriately when it comes to time to sell.

In order for that to happen, there will need to be serious action taken against those companies that have mis-sold burial plots in the past – something that is starting to happen now.

Admittedly, it isn’t straightforward, due to its unregulated nature. But compensation claims can be made – independent financial advisors are your best option as they have a broader understanding of what would be classified as mis-selling, so they can help you identify if you were sold something unsuitable.

If you’re thinking about how best to invest your SIPP, speak to a trusted independent financial advisor. They’ll be able to tell you if and when burial plots become a valid option, but make sure you comprehend their advice before you take any action.

There will always be risks involved, so don’t trust any advice that guarantees you a return – but you may stand to make a reasonable profit if managed correctly.

What to Do if You’ve Lost Money in an Investment

If you have money tied up in a burial plot investment that you cannot get a return on, either because the company has gone silent or the plot just isn’t selling, don’t despair as you may still have a way of reclaiming your money.

If you were given bad advice that suggested guaranteed returns or misled you factually, then you could make a claim to the Pensions Ombudsman who ultimately may be able to help you get compensation.

Ideally, you’ll need the support of an independent financial advisor on your side who can help establish the facts in your case, so that you’ve got the best chance of success.

The Dangers of Investing in Illiquid Assets

While to some, the idea of investing in burial plot may seem a little macabre, when you look at the facts and figures, in theory, it makes perfect sense. The problem is that the market is unregulated, uncontrolled, and unfortunately, those who have invested pension funds into burial plots may struggle to sell them in the future.

At this moment in time, despite the growing number of deaths in the UK, this is an illiquid market. The worst type of market for a pension fund investment - what happens when you need to liquidate your assets to pay your pension?

Can You Pursue Compensation for an Unregulated Investment?

Unfortunately, unregulated investments offer investors very little in the way of protection. This is why many pension fund investors back away from unregulated investments because there is always a degree of uncertainty.

There are some unregulated investments that work perfectly well for pension funds, but they are often few and far between. So, if unregulated investments are not covered by the FCA, how can you claim compensation?

Could Your Financial Adviser Be Liable for Damages?

As you can’t directly seek compensation from burial plot market participants, you may be able to take a step backwards and claim compensation/damages from your financial adviser. In hindsight, the mechanics of investing in burial plots and creating a liquid market were always going to be challenging at best.

As a consequence, you could legitimately argue that any financial adviser who recommended this type of investment could be liable for damages. Was this really an appropriate investment for a pension fund?

How Do You Apply for Compensation?

When seeking compensation/damages, you will need to prove that your adviser was negligent when recommending burial plots as an investment opportunity for your pension fund. Once you have gathered as much information/evidence as possible- there should be a paper trail for this type of investment - it is time to approach a claims management company.

What Will the Claims Management Company Do Next?

The claims management company will review your case and the evidence you have provided. They will give you an honest assessment of your chances of success and anything you can do to enhance your case. If they believe you have a minimum 60% chance of success, then they will likely offer to take up your case on a “no win no fee” arrangement.

This effectively means that you are indemnified from costs incurred by the claims management company in pursuing your case. In exchange for this exemption, they will request a “success fee” should the case be proven and compensation awarded.

What Is the Average Rate for a Success Fee?

Traditionally a success fee is around 25% of any compensation received, and this agreement will be signed prior to pursuing the claim. This is the claims management company’s reward/payment for concluding a successful claim while taking on all relevant costs themselves.

The 25% fee is not set in stone, but in reality, it shouldn’t be too far away from this figure.

How Can Money Savings Advice Help You With Making a Mis-Sold Pension Claim?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Financial Claims management companies. They have already helped thousands of people claim compensation for a mis-sold pension and they can do the same for you.

Choosing an independent claims management company means they won’t proceed with a claim unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these claim management companies who can help you make a compensation claim, then click on the below and answer the very simple questions.