Were you mis-sold your pension? It can be difficult to tell, especially if your financial advisor didn’t do anything obviously wrong. However, if your current private pension isn’t offering as much income as you would have received from your old workplace pension, then you may have cause for complaint.
Mis-sold pensions is a common problem in the UK, and it’s an issue that can have very serious repercussions, especially on older people. The Financial Ombudsman Service takes claims for mis-sold pensions very seriously, but you may not be sure if you are able to claim. Here are five examples of pension mis-selling to help you identify whether your pension was incorrectly sold to you in the past.
Five Ways Your Pension May Have Been Mis-Sold to You
You were not offered a ‘personal recommendation’
The FCA recently proposed that all financial advisors should offer a more detailed assessment of their client’s needs, in the form of a ‘personal recommendation’. This means that the advisor should take your circumstances and financial responsibilities into account, then offer a professional recommendation, based on your unique situation. A generalised ‘one-size-fits-all’ approach is unacceptable, and is likely to result in customers agreeing to pension plans that aren’t suitable for them.
You were not given the option to continue with a work pension plan
Many people review their pension options when they’re about to change career, and subsequently swap their work pension scheme for a private plan. This is perfectly acceptable, unless your financial advisor failed to explain the implications to you. It’s even worse if they didn’t tell you that you could simply transfer your existing pension funds to your new work pension.
You were actively advised to transfer away even though you had no plans to change jobs
If your adviser seems to be actively recommending that you transfer away from your employer’s pension scheme, despite the fact that you clearly expressed that you had every intention of staying in your job and continuing to pay into it, then your advisor could be in breach of financial regulations.
You had no idea there were so many options
There are several pension plans out there, each with their own specific benefits. An impartial financial advisor should inform you about the full range available, and encourage you to shop around for the best deal. However, this doesn’t always happen. Occasionally, an unscrupulous advisor may push a customer towards a certain product, regardless of whether it’s the best one for them or not. In this instance, making a claim is the logical next step.
You were pushed into choosing a higher-risk product
Your attitude to risk is an integral part of selecting the right pension package, and a good financial advisor should assess just how risk-adverse you are. In the past, some people were encouraged to transfer their pension into a SSAS (investing in risky industries, such as property syndicates) or a SIPP. These types of plans are good for those who don’t object to risk, but highly unsuited to those looking for safe, reliable investments.
If any of the above sound familiar, it’s possible that you were mis-sold your pension plan, and if so, it’s your right to take action. A mis-sold pensions expert will offer impartial advice, and help you to make a claim and receive compensation, if required.