Mis-selling of pension schemes is not uncommon. In fact, the problems are so prevalent that the Financial Conduct Authority (FCA) has dedicated information on its website to help people understand their rights and avoid being mis-sold again. If you think your pension could have been mis-sold, there are several things you need to know, and you may also need legal representation. Keller Postman UK can help.
If you’ve been mis-sold, what are your options? This article covers everything you need to know about your pension or other investments and if it’s been mis-sold.
Check if you’ve been mis-sold your pension
The first step in determining if your pension was mis-sold is to check the type of pension you have and its characteristics. The main types of pensions are:
- Defined contribution (DC) – This type of pension is based on your contributions, the performance of your investments, and the charges applied. It’s likely to be a type of money purchase pension.
- Defined benefit (DB) – This type of pension is calculated based on how long you’ve worked for the company and your salary at the end of your employment.
You may have been advised to move from a relatively safe investment to a Self Invested Personal Pension Scheme (SIPP) that carried a promise of greater reward but much greater risk.
What is a mis-sold pension claim?
When a pension product is sold, there is an expectation that the financial advice provided should be to the highest standards and in the client’s best interests. Unfortunately, in some cases poor or misleading advice may have been provided and this has resulted in large losses and poor performance for many people.
Mis-sold pension claims arise when people were provided with bad or unsuitable financial advice on their pension arrangements and this led to them committing to new pension arrangements that were not in their best interests.
A financial advisor should take into account certain factors regarding their client before recommending pension products including:
- income
- outgoings
- financial dependents (children or elderly relatives)
- future retirement plans
- attitude to risk.
Where this has not been done, it would generally be considered mis-selling.
In many instances, some pension advisors may have intentionally given bad advice just so they could net substantial commissions. People were often incorrectly advised to invest their pension in high-risk sectors, or were promised unrealistic returns on their investments.
Can I make a claim and how long is this likely to take?
Claims can sometimes be dealt with in just a matter of months, while others could take much longer. The length of time often depends on how quickly information is able to be obtained in order that a review of your pension arrangements can be carried out by someone acting on your behalf.
The amount of compensation you could receive will depend on how much you’ve potentially lost out on as a result of the mis-selling. The element of risk with any alternative pension or investment; whether you had an alternative pension; the length of time until you retire; plus any other financial loss will all be taken into consideration when a compensation amount is worked out if a case of financial mis-selling is proven.
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