When the government offered retirees more freedom with their pensions in 2015, thousands signed up for annuities in the belief they would benefit from a sustainable income that reflected their personal circumstances. Unfortunately, it has come to light that in the past couple of years many individuals were sold inappropriate annuities that benefited the provider far more than it did the pension holder. This has had a negative impact on their finances and left many unsure as to whether they can claim compensation.
What is annuity mis-selling?
Anyone who has allowed an annuity firm to manage their pension pot does so in the belief they will receive a guaranteed income for the rest of their life. To ensure customers get the best deal, there are rules in place that firms must tell customers so that they can compare offers in order to achieve the best rate possible
This is because customers with health conditions – such as high blood pressure – could be eligible for a higher annuity rate annuity as their life expectancy will be shorter. However, it has been revealed that hundreds of thousands of customers were mis-sold annuities that did not take their shortened life expectancy into account.
Many customers were not informed they could enjoy a bigger income if they had secured a different product or had a shortened life expectancy. By not providing them with the relevant information, providers were able to keep the remaining money left in the pension pot after the customer died.
How do you tell if you have been mis-sold an annuity?
If you believe you have been mis-sold an annuity, there are three key signs to be aware of that may have occurred during the selling process:
- Lack of health coverage: If your annuity did not take into account a health condition that could shorten your life expectancy, you could have been mis-sold by the provider. Without this being given consideration, your money will be spread across a longer period of time than your current health indicates you will be alive for. This may lead to you receiving less money than you are entitled to.
- No alternative options: While a financial advisor should always try to encourage you to take the best deal available, they also have a responsibility to make you aware of all choices at your disposal. Some customers who were sold an annuity were not given this option, which in-turn could mean the provider is liable for mis-selling them the wrong product.
- Hidden charges: Before signing up to an annuity, you should be told about any charges associated with the product that are payable either immediately, or at a later date. Failure to do so could mean the company who sold the annuity did so dishonestly.
You may have been mis-sold a pension if you feel your adviser didn't take into account your personal circumstances and preferences, or you were actively advised to transfer away from your employer's pension scheme. Many people who have been mis-sold to were advised to transfer their money to an SSAS or an SIPP. Both of these schemes are considered riskier than traditional pension plans, and your money may have been invested in areas such as carbon credits or overseas property. If you weren't correctly informed of the risks involved with these plans, or weren't told about other pension options, then your pension may have been mis-sold.
Claiming on a mis-sold annuity
If you believe you have been mis-sold an annuity there are options available to help you reclaim some compensation.
Goodwin Barrett have many years' experience helping clients who have been mis-sold financial products. As such, we are experts in the financial field and in a good position to handle your mis-sold annuity claim.
If you would like more information on how we can help you to reclaim money from a mis-sold annuity, or to simply talk through your situation, call our friendly team of experts on 0808 163 1659 or email firstname.lastname@example.org. Alternatively, you can enter your details in the form at the top right and we'll call you back.