The Financial Conduct Authority (FCA) has been contacted by savers about overseas firms advising expats to transfer or switch their UK pensions into a self-invested personal pension (Sipp).
The Sipps are often dubbed ‘international Sipps’.
The queries from clients to the UK regulator typically relate to “the charges being paid in these overall arrangements”.
Overseas advisory firms often invest consumers’ pension funds through an offshore investment bond within an international Sipp.
The FCA said: “We are concerned that consumers who invest in this way may be exposed to high and/or unnecessary charges.
“We are also concerned that the tax benefits of investing through an offshore investment bond are largely redundant to someone investing in a UK personal pension scheme.
“If you are approached by an overseas adviser, you should consider if these arrangements are in your best interests.
“Make sure that you understand all charges that may be incurred by the overall arrangements, as well as any exit penalty charges that may apply.”
The UK watchdog also said that any members of defined benefit (DB) pension schemes that are considering transferring out into an international Sipp should contact the The Pensions Advisory Service, for impartial guidance before taking any further action.
It believes “transferring out of a DB pension scheme is unlikely to be in the best interests of most consumers”.