25 FEB 2021

Mis-sold Pension Transfers – A Closer Look

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Retirement has always been deemed a blissful part of life. After working for decades, you’re now given the opportunity to rest and enjoy life, with your hard-earned money in tow for your new homes, dream vacations, and essentially pampering yourself for the rest of your life. 

Unfortunately, the retirees in the UK are currently going through a crisis—and it seems like financial advisors have been trying to leech off this hard-earned money, sending the elderly lost and confused about loss of money. 

The Financial Conduct Authority (FCA) is currently staying on top of things, especially after finding out that financial advisors have been giving retirees too much advice about their pensions, prompting them to invest their money unnecessarily and in less than ideal situations.

The defined benefit (DB) transfer advice managed by financial advisors is to blame, leading to instances of mis-sold circumstances. In other words, pension transfers have now become a cause of hardship for many, when it shouldn’t be.

 

A Closer Look Into The Market: What Has Been Mis-sold?

According to the FCA, many financial advisors are currently engaged in delivering poor advice. These financial advisors are mostly driven by conflicts of interest, especially when it comes to the amounts they are currently remunerated. More and more advisors are engaging in mis-selling due to the practice of contingent charging, in which advisors can only be paid when a pension transfer happens. 

Unfortunately, the receiving end of the losing deal is the retirees. Consumers now are mostly given financial advice such as the following:

  • Prioritising the inheritance tax benefits of transferring DC pensions, all without taking other opportunities into account, such as a life cover
  • Failing or neglecting to communicate the longevity or risk transferring, especially when it comes to a DC pension, not explaining the repercussions should the member live longer than expected
  • Urging people to do what they want with their money, downplaying any risks and harms that come with transferring to DC

 

The Redress—What Consumers Can Do

If you or someone you know has made a DB transfer under poor circumstances and unsuitable advice, you are empowered to make a complaint. Should it be deemed clear, you will be entitled to a redress, which can go as far as where your pension will be had you not taken the advice. 

To ensure that you can successfully apply for redress, consider the following steps below:

  • Step 1: Complain to the first that has given you the advice.
  • Step 2:  If you find their response to the matter unsatisfactory or nonexistent, proceed to the Financial Ombudsman Service (FOS) for another complaint.
  • Step 3: If you still deem the response as unsatisfactory and without compensation, proceed to the Financial Services Compensation Scheme (FSCS). You can file a claim here, ensuring that you get whatever amount you have lost. 

 

Mis-sold? Enlist The Help Of The Best In The UK

Unfortunately, the level of pension complaints is only expected to rise. Financial advice firms have also voiced concerns regarding this matter, but the rising costs of insurance are another matter. If you’re transferred your pension to DC, know that you’re not alone—claims can still be made possible.

Consumer Reclaim’s expert financial mis-selling team in the UK can help you reclaim your lost pensions, ensuring that you gain back what you deserve. Allow us to offer you proper advice and counsel, as we tailor our solutions to your needs. Reach out to us today!

 

Consumer Reclaim Ltd is regulated by the Financial Conduct Authority in respect of regulated claims management activities, reference number: 835212. Registration is recorded at: https://register.fca.org.uk. Consumer Reclaim Ltd is registered in England and Wales, Company Registration number: 07223077. Information Commissioner Office number: ZA176000. VAT number: 144 4752 12