Go back

Why green energy investments may not be a safe pension option

Go back


Have you heard green energy is the future? Then you could be forgiven for thinking that green energy projects are also a step in the right direction financially. Green energy investments vary from solar panels to wind farms and green-oil plantations. Some offer highly tempting returns of up to 9% per year.

The appeal is perfectly clear; investors get a chance to help create a cleaner, greener future for our world while padding out their pension pots for their own future. Unfortunately many are finding out the hard way that green energy isn’t such a safe investment after all.

What makes green energy investments risky?

While not all green energy investments are bad news, they are not without risk. Here are just some of the risks involved:

Your money is not protected:

Most green energy project investments are not covered by the Financial Services Compensation Scheme (FSCS). This means if the project goes bust for any reason you could lose all of your money.

Your money is hard to access:

One of the main catches of green energy projects is that they often take years to bear any fruit. Most projects like this will essentially lock in your money for at least three years. Others can take as many as 20 years. Accessing your money early is possible in some cases. However, more often than not you will find your money is out of your reach for the long haul.

Green energy can be volatile and unreliable:

Though high returns are often promised, the fact remains that the green energy industry is unpredictable. They are very much at the mercy of oil price fluctuations. Whenever oil and gas prices fall it renders green energy less competitive. This means the value of your investment could take a hit at any time.

Some are unregulated by the Financial Conduct Authority (FCA):

Some investment firms have been exposed as selling green energy investment schemes as part of SIPPs without authority and regulation by the FCA. This leaves investors in highly compromising situations as many of these unregulated schemes turn out to be fraudulent.

Green energy projects are unsuitable for most investors:

Green energy projects are highly unsuitable for most small investors. This is because they often have insufficient experience in high-risk ventures. Despite this, many small investors have been sold green energy investment schemes as part of SIPPs, something that has become increasingly common since the introduction of the pension freedoms reforms in 2015.

Green energy SIPP mis-selling

Financial advisors and investment firms are obliged to ensure that all potential investors are suitable candidates for any high-risk investment opportunities. If you were sold a SIPP including green energy project investments then your pension pot could be at risk. Check your circumstances against the below criteria to see if you may be eligible for compensation for financial mis-selling:

  • Poor Advice – Did your financial advisor fail to explain the full risks to you before recommending your SIPP?
  • Insufficient Net Worth – Do you earn less than £100,000 per year? This is the financial threshold in place for investors with this type of high-risk scheme.
  • New to Investing – Are you a small investor with no experience of managing your own high-risk investments?

If any or all of the above ring true for you then it is highly likely that your SIPP was mis-sold and that you are eligible for compensation. Our team of experienced solicitors here at APJ can guide you through the process with transparent, trustworthy advice. Simply give us a call or fill out our online contact today.