Was your pension mis-sold?
Did you know that pension mis-selling may become the next big financial scandal in the UK? A research conducted by the Financial Conduct Authority (FCA) showed that one in eight people who received financial advice in the last 12 months had an adviser mis-sell them an investment product or pension product at some point.
How Can You Tell if You Have Been Mis-Sold a Pension?
If your Financial Adviser Pressured You into Accepting the Pension Plan
If your Adviser Didn’t Ask About Your Personal Circumstances
If your Pension Pack Contained Misleading Information
If your Adviser Asked You to Transfer Your Pension Without There Being Any Benefit to You
If you Weren’t Offered all the Available Options
Let’s check if you can claim back
If you have moved your pension into a self-invested personal pension (SIPP) you might be eligible for compensation, complete the short form below to find out if you can claim back.
Common Types of Mis-sold Pensions
SIPPs are usually set up to hold under-performing, illiquid, high risk investments with higher charging structures. With a SIPP, you do not have to involve your employer. All you have to do is enter an agreement with your pension provider and you start making payments for your pension.
Unlike most types of pension, an FSAVC does not hold any limit on the amount of money you can pay into your pension fund every month. As of April 2006, this figure can be 100% of your income if you prefer to invest it all.
Having an FSAVC gives you the freedom of choosing how the amount of money you want to save for retirement. It is an ideal option if you looking for a pension plan that gives flexibility with your outgoings.
With a Final Salary Transfer, your employer takes into account your final salary at the time of your retirement and provides a sum that is equivalent your known last pay. Due to its nature, it is not recommendable to transfer this form of pension to any other form pension product or pension provider.
Final Salary Transfers are popular because they provide guaranteed income that increases as your salary increases with the same employer. The scheme usually has built-in guarantees, such as a final value that is worth 2 to 5 times higher than your initial value. This explains why it is not advisable to transfer this pension scheme at all.
Yet, despite these multiple benefits, many final salary pensions were still transferred, leading to consumers sustaining huge financial losses and consequently being eligible for compensation.
An OPS is usually set up by an unregulated entity to avoid the regulated advice process. An OPS usually reference an account that your employer set up to help you save for your retirement. In most cases, an OPS falls under three categories:
- Cash balance plans
- Defined contribution pension schemes
- Defined benefit pension schemes
Usually, workplace pension schemes require your employer to contribute towards your pension. The amount the employer contributes matches the sum that is deducted from your monthly/ weekly wage.
QROPS is a type of oversees pension scheme that still abides with certain HMRC requirements. The scheme is specially designed for those who plan to emigrate overseas after their retirement. However, many consumers have been mis-sold a QROPS, with the promise of a cash advance once a pension transfer was made, but that ultimately results in a 55% income tax charge.