Pension mis-selling can occur when people are targeted and talked into transferring their pensions into unregulated, unsuitable or failed investments. In many cases, people are advised to transfer perfectly good schemes into more expensive, complicated, and unsuitable products which they simply don’t require. Pension mis-selling is a growing problem, and victims have the right to claim compensation. But how would you know if your pension was mis-sold? Here are five tell-tale signs.
1. You transferred your final salary/defined benefit pensions into a SIPP, QROPS or another personal pension
Many victims of pension mis-selling have transferred from safe and secure final salary/defined benefit pensions (workplace pensions) into Self-Invested Personal Pensions (SIPPs), Qualifying Recognised Overseas Pension Schemes (QROPS) or other personal pensions. These people would have been better off keeping their money in their workplace pension scheme. Many types of employees have fallen victim to pension mis-selling including civil servants, teachers and those working for the emergency services.
Thousands of British Armed Forces personnel have also been mis-sold after being convinced to transfer out of the MoD pension scheme.
2. You were targeted by an unregulated salesperson (possibly via a cold call)
Serious mis-selling often happens when people are targeted by unregulated salespeople, often via cold calls. The motivation behind this is usually the generation of fees or commission for the advisers. Using hard -sell, pushy techniques, these advisors are often not as qualified or knowledgeable as they lead people to believe.
3. You moved your workplace pension to a private scheme, and the provider or adviser has gone out of business.
If you were advised to transfer from a workplace pension to an unsuitable scheme and you can no longer access your pension because the provider or adviser has since gone out of business, you may have a claim.
The Financial Services Compensation Scheme (FSCS) exists to protect consumers when financial firms fail. The FSCS has forecasted sharp increases in claims for mis-sold pensions, with the overall compensation fund expected to reach £1 billion by 2022. If a UK-regulated adviser has given bad advice concerning a pension transfer, and the provider or advisor has since gone out of business, the FSCS may be able to pay compensation up to £85,000.
4. The negligence of your financial advisor has (or could have) made you worse off in life (e.g. you have lost money or been hit by high fees)
When you get financial advice from a professional, you are owed a certain duty of care. They are obligated to find the right products for you. However, because of bad advice, many people have lost thousands of pounds from their pension pots. Others have lost the guarantees that came with their pensions (e.g. to rise with inflation). Some have made unregulated, unsuitable, and potentially fraudulent investments leaving them open to the wrath of HMRC. In many cases, victims of pension mis-selling are hit with high fees and charges.
If you have received bad advice from a financial advisor, you may be eligible for mis-sold pension compensation.
5. You were not told about the risks of transferring your pension (or these were not fully explained) or the promised benefits did not materialise
For most people, a high-risk pension will not be suitable for them. Some investments are unpredictable by nature, and if you have a high-risk pension that doesn’t necessarily mean that you have been mis-sold. But you should have been told about the level of risk involved. Likewise, if an advisor specifically promises a level of return that does not materialise, you could have been mis-sold.
Claim compensation with KP Law
Representing people in England and Wales, at KP Law we help our clients claim back what they are due following pension mis-selling. We can advise on complex pension advice claims and failures of pension operators. And, if you appoint us as your expert financial fraud & mis-selling lawyer, you’ll stand the best chance of success.
Making a claim with KP Law is straightforward. It is free to sign up and we act on a strict no-win, no-fee basis, so, as our client, you will not pay us anything upfront.
If you believe that you have been mis-sold a pension, contact us to find out more about what making a claim involves. If you are not sure if you have a claim, we can find this out for you.
