The storage pod scheme is, on the surface, simple. You purchase storage containers or pods. These are then rented out to people who use them to store their belongings. The money received from rentals makes up the returns on your investment. Later on, you can sell your storage pod for a profit.
It all seems straightforward enough. But, in reality, these self-storage facilities—sold as a smart business opportunity—are anything but a wise investment.
One well-documented case involves the Store First company, which claimed a ‘guaranteed income’ to investors. The scheme was even promoted by former Top Gear presenter Quentin Willson who appeared in ads endorsing it. Thousands of people were persuaded to invest in storage pods in the hopes of increasing their retirement funds through rental income.
They were promised a guaranteed 8% return in the first two years. This would increase to 10% in the following years—returns that are much higher than average. The investment was promoted as a safe one.
However, the reality was that many of the storage pods lay empty, generating very little profit. Investors never received the income they were promised but still had to pay management fees to the company. Having lost their hard-earned savings, they were then also unable to sell their pods on.
This alleged fraud is thought to have cost victims a combined total of more than £120 million, according to the Serious Fraud Office, who in 2017 launched an investigation into the sale of storage containers.
The increase in scams of this nature is partly due to the government’s pension reform of 2015. These reforms gave over-55s easier access to their retirement cash, allowing them to spend it how they wanted.
This freedom, however, left many people vulnerable to fraud, with retirees being advised to transfer their pension from well-established final salary or direct benefit workplace pensions into unregulated Self-Invested Personal Pensions.
These funds were then invested in single-asset, high-risk schemes—such as the storage pod scheme—with the promise of high returns. Some investors have lost all their retirement savings as a result of these scams.
If you received pension transfer advice that resulted in your funds being invested in unregulated assets—like storage pods—and have lost money, you’re eligible for compensation.
However, the process of claiming compensation can be complex and daunting. Consider seeking the help of organisations such as Assist.Claims, which operates on a no-win, no-fee basis.
Experts are also advising people to beware of any unregulated unusual investments, both at home and abroad.