What has happened?
Thousands of people in the UK, have been poorly advised by their pension expert to transfer out of a guaranteed final salary pension scheme into a much riskier personal pension or Self-Invested Personal Pension (SIPP).
What does it mean for me?
This type of advice is unlikely to be suitable for most people, and you are likely to be worse off financially. The Financial Conduct Authority has investigated, and is now telling people in this situation to raise complaints to their adviser or to claim compensation from the Financial Services Compensation Scheme.
What did the Financial Conduct Authority discover?
The Financial Conduct Authority carried out a study in 2018. They found that OVER HALF of the recommendations to transfer out of a guaranteed final salary pension were unsuitable. In fact, in situations where the firm is no longer trading, the FCA have advised people to file a claim with the Financial Services Compensation Scheme, which can pay compensation for inadequate advice of up to £85,000.
In a letter sent out to 2,677 people, the FCA stated that, ‘We encourage you to act. This is not a marketing activity. If you do nothing, you may end up with less money during your retirement.’
More and more people are now making claims because they were advised to transfer from a guaranteed final salary pension scheme to a personal pension or SIPP.
The key difference is that a final salary pension provides a guaranteed pension in retirement. However, a personal pension or SIPP needs to be actively managed by the client or the pension adviser. It’s a much riskier way to save for retirement. For most people, it’s not a good idea to transfer out of a guaranteed final salary scheme.
Were you badly advised on your pension transfer?
Pension advisers have to abide by strict codes of practice. So when you transferred your final salary pension:
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Were you advised to transfer away from your employer’s final salary scheme?
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Did the adviser explain that you would be giving up valuable guaranteed pension benefits?
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Were you advised to move your pension to a SIPP without the risk being properly explained?
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Were you advised to transfer your pension into a SIPP investing in carbon credits, property syndicates or other risky sectors?
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Did the adviser take into account your health and medical issues?
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Did the adviser give you all the information you needed?
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Were you given all the options available to get the best possible deal?
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Did you have to pay any additional charges?
If the answer is yes, then its likely you received poor pension advice. You might well have ended up losing money on your final pension, and having much less to fund your retirement.
To find out if you have grounds for a complaint or if you’re eligible to receive compensation from the Financial Services Compensation Scheme, contact Hallbrook today and we’ll start the process as quickly as possible. We can help you fight your case to achieve justice and receive the financial redress you deserve.
You do not need to appoint any third party to present a claim to the Firm, the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS), and you are within your rights to present a self-represented claim which would cost you nothing. A complaint must be addressed to the firm before it can be referred to the FOS.
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