Financial Ombudsman Report a 91% Increase In Pension & Investment Complaints
It’s safe to say the past year has brought unprecedented challenges for businesses and consumers. Therefore, it won’t come as a surprise that the Financial Ombudsman Service (FOS) have seen a 58% increase in the number of complaints it received in the past 18 month compared to the previous period.
Pensions and investments: only one part of the picture
Pensions and investments are one category of complaints measured by the FOS. They warrant a closer look not only because of the large increase but also because of the general increase in complaints across the board.
According to the FOS, out of the 20,854 new complaints made in 2020/2021, 6,613 were relating to the mis-selling of investment and pension products. This included complaints about unsuitable advice and the financial product not being explained properly to them.
Within the pensions and investments category, self-invested personal pensions (SIPPs) top the list with more than 3,000 new complaints. Many of these complaints were related to mis-selling whereby the SIPP operators did not conduct appropriate checks on the investments / introducers involved, resulting in the loss of consumer’s pensions.
Out of all complaints made in the pensions and investments bracket, the FOS upheld 22%. The picture is different for SIPPs: 56% of claims were upheld in 2020/21. So, why are these pensions so problematic?
A lack of consumer understanding
SIPPs can be a great way of saving for your retirement but they are not suitable for everyone. They allow you to have the freedom to invest in a range of financial products approved by HMRC, helping you to save whilst taking advantage of tax breaks. However, it’s not always easy for consumers to decide how to invest.
Another aspect consumers tend to forget about is that pension values fluctuate. Of course, you would like your pension to grow every year by more than the value of your contributions, but this doesn’t always happen in practice. The deciding factor is the performance of the assets your contributions are invested in.
Timing also has a role to play. When you prepare to take pension benefits, switch plans, or transfer your pension to another plan, you receive a quotation of its value. However, this value may have changed by the time the transfer is made. SIPPs can be fickle in that way.
Have I been mis-sold to?
Unfortunately, SIPP mis-selling and other types of financial mis-selling are becoming more and more common. Here are a few tell-tale signs to look out for if you think you’ve been mis-sold to:
- You didn’t understand where your money was being invested
- Your financial advisor did not check your attitude to risk
- You didn’t understand the risk level of your investment
- You weren’t offered any alternative products
These are just a few things to consider in relation to financial mis-selling. Most financial advisors will strive to do their best for you and your money.
However, if you feel that you have been mis-sold an investment or a pension, you might be eligible to receive compensation for your financial losses. To find out more about making a claim, get in touch with the Goodwin Barrett team today, by calling 0808 163 1659 today or email firstname.lastname@example.org.