A self-storage unit investment is also known as a storage pod. It is also one of the latest types of investment scheme to come under the microscope of the Serious Fraud Office (SFO).
On the surface, self-storage unit investment schemes seem fairly straightforward. They also appear to guarantee a high return on investment. Investors simply purchase a long-term lease on a storage unit. They then sit back and relax, while the self-storage company then rents it out to customers. The company also handle upkeep in return for a fee.
Self storage unit SIPPs under investigation
The problem is that these double-figure returning investments are proving disastrous for savers. A 2017 SFO investigation found that over £120 million of investors’ money has been ploughed into self-storage unit investments. Much of this is via self-invested personal pension schemes (SIPPs). As a result, large numbers of people have lost huge amounts of money.
The investigation, which has looked into schemes such as Capita Oak Pension and Henley Retirement Benefit, found more than 1000 individuals who had been persuaded to transfer their entire pension pots into high-risk self-storage investments. This is incontract to the secure and generous workplace pension schemes they did hold. And many, it turns out, have lost some or all of their life savings as a result.
Why are self-storage unit investments dangerous?
To the untrained eye self storage units seem like a safe, sound investment for padding out retirement funds. And, with many schemes forecasting tempting 8-12% returns, it’s little wonder investors are biting. However, here is why self-storage investments present dangers to retirement savers:
A false sense of security – It is the seemingly safe and secure nature of storage pods that make them so alluring to non risk-savvy investors. They may not be as exotic and exciting as beautiful hotel developments in sun-soaked Mediterranean countries but, given that overseas property investment schemes already have a reputation for scams and losses, it is unsurprising that investors are finding it easier to trust in storage units located on home turf.
An unregulated investment – Self-storage unit investment schemes are unregulated, which means they are not under the protective restrictions of the Financial Conduct Authority (FCA). This leaves investors open to even higher risks than are usually associated with investments, with less support if they lose money.
Misleading information – Investigations by the SFO revealed that storage facilities such as Store First Ltd were promising investors healthy returns based on high rental yields, but it transpired that there was little evidence to support the feasibility of such yields.
Self-storage SIPP mis-selling
Self-storage unit investment schemes have been aggressively marketed to SIPP investors who know little of the risks involved. If you have invested your money in self-storage units as part of a SIPP you could be eligible for compensation.
Do any of the following apply to you?
You were given misleading advice
Were you advised to invest some or all of your pension pot into a SIPP which included high-risk storage unit investments despite having an inexperienced investor profile?
You were not informed of the risks
Did you invest in a SIPP on the advice of your provider? Were you made fully aware of all the risks involved?
You were promised high returns
Were you promised large, attractive returns on your self-storage unit investment that never materialised? Were these not available to you when you tried to access them?
If any of the above points ring true for you then give our team of experienced solicitors a call to get trustworthy advice on how to seek compensation.