Pension mis-selling has been a growing problem in the last few years, which shows no signs of abating. In fact, new data released from the Financial Ombudsman Service (FOS) reveals that the issue could be getting worse.
If you’ve transferred your existing workplace pension into a personal pension product, there’s a chance you may have been mis-sold to. Here’s some information about the FOS’s findings, and what to do if you’ve been a victim of mis-selling.
Cases on the rise
According to the FOS’s latest figures, 825 individuals complained about pension mis-selling between July and September 2020. That’s a significant rise from the period between April and June – 136%, to be precise.
Likewise, personal pension enquiries were significantly up; increasing from 349 in April to June, to 980 from July to September.
Areas of complaint
The FOS received a wide range of complaints, with many relating to the way in which the pension product was sold, and its suitability for the consumer. Other issues were:
- Charges – particularly hidden fees that hadn’t been explained properly to the customer
- Fund management – poor management leading to a loss of funds
- Delayed processes – delays in setting up the pension, which then had negative impact
The COVID-19 pandemic has also an effect on the level of complaints, with several linked directly to coronavirus. Most of these complaints stem from customers who have struggled financially during 2020, and who felt that their pension provider hasn’t responded in an adequate manner.
Are SIPPS still an issue?
The FOS has dealt with hundreds of complaints related to SIPPS, and the problems associated with this type of pension product are now well documented.
However, regulatory bodies such as the FCA are taking steps to address mis-selling in this area, and are tightening up their monitoring of independent financial advisors and SIPPS providers alike. Hopefully, this means that cases of SIPPS mis-selling may start to fall as time goes on.
What counts as mis-selling?
Mis-selling can take many different forms. If you’ve recently invested in a personal pension product, ask yourself the following questions:
- Did they explain the pension properly? As a customer, it’s your right to understand exactly what your money has been invested into. If the advisor failed to explain the details, that’s mis-selling.
- Did they outline the risks, and assess your attitude to risk? Some pensions are riskier than others. You should have been asked about your attitude to risk, and told exactly how risky your new pension was.
- Did they offer a full range of options? Your advisor should have asked about your personal circumstances, and your financial plans for the future. Using this information, they should have then offered you a full range of pension products. If you were only presented with one or two, this might be a case of mis-selling.
- Did you feel pressurised? You should never feel pressurised to transfer your pension. Any forceful selling techniques are regarded as poor practice.
What to do if you’ve been mis-sold your pension
If you suspect that your pension was mis-sold to you, get in touch with the Goodwin Barrett team today on 0808 163 1659 today or email firstname.lastname@example.org.