Pension Inequality: Many Women Have Been Mis-Sold Pensions
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Previous research has shown that, when it comes to pension mis-selling (and seeking compensation), age and geographic location have considerable impact.
But did you know that gender is also a factor? According to the latest study, more women than men are missing out on compensation for their mis-sold pensions – which often equates to thousands of pounds per person. Here are more details.
The current problem with pensions
Getting the right pension is vital for your retirement. A transfer to a SIPP may be a beneficial move, but it’s important to understand exactly what you’ll be investing in, and how risky it might be.
Many people choose to invest in a SIPP, believing it’ll generate more money than their existing pension – only to find out that they lose cash instead. For many, the root cause is the same – the financial advice received was inadequate or misleading. In severe cases, it may even have been fraudulent.
Resolving the issue
Victims of SIPPs mis-selling can seek compensation. However, recent data from the Financial Ombudsman Service suggests that men are far more likely to ask for compensation than women.
The initial study was carried out by Sarah Stokes, a pensions expert. She interviewed hundreds of women, and found that many were saying the same thing – they were unaware they could claim any compensation for their financial loss. She applied to the FOS, asking for official figures to back up her findings.
The data revealed that in 2019, out of 275 complaints about mis-sold pensions, only 40 were made by women. This works out as under 20%.
A worrying concern
Stokes commented: “Critically, women aren’t seeking financial redress when they should. It is a situation that has been well-known within the pensions industry for some time, but only now have we had the concrete figures which illustrate the problem.”
It’s also important to note that this isn’t due to women taking out less pension products than men. In fact, close to half of all personal pensions belong to females.
As a result of the study, the Work and Pensions Committee will now be scrutinising exactly how greater pension freedom has impacted the risk of scamming.
Scammed… and no compensation?
Stokes found that women were often targeted out of the blue, “by an advisor who went for the hard sale as soon as they found out they worked in the NHS or teaching profession.” She added, “unscrupulous doesn’t cover it”.
The FCA and The Pensions Regulator suggested that in 2018, victims of mis-selling had lost an average of £82,000 each. However, despite losing such large sums of money, only a few people were lodging formal complaints and seeking compensation.
Chair of the Committee Stephen Timms commented: “To me it sounds useful to gender monitor for pension mis-selling and compensation applications. If it is the case that women are taking less advantage than they should of the help that the Financial Ombudsman Service provides, then it is certainly something we should look at in the course of our inquiry.”
Signs of mis-selling
If you’ve invested in a pension product recently, here are a few classic signs of mis-selling to look out for:
- Inadequate information. Your financial advisor should explain the pension thoroughly, and all information should be clear and accurate.
- Lack of explanation of risk. The level of risk should be clearly outlined.
- Lack of risk assessment. Likewise, your attitude to risk should be assessed.
- Pressurised sale. If you were coerced or pressurised into agreeing, this counts as mis-selling.
What to do if you’ve been mis-sold to
If you believe that you’ve been mis-sold to, get in touch with the Goodwin Barrett team today on 0808 163 1659 today or email enquiries@goodwinbarrett.co.uk. We’ll examine the case on your behalf, then if you’re eligible for compensation, we’ll ensure that you receive what you’re owed.
