Mis-sold pensions include any pension scheme which you were advised to invest in without having all of the information available. An advisor may have recommended you to change to a specific pension scheme without telling you about the financial risks involved with the scheme, for example. The transfers may also be sold on the promise of a more comfortable retirement, which is not always the case. If you feel you have been mis-sold a pension, then we may be able to help you make a claim.
There are a number of mis-sold pensions that someone can be a victim of. These include SIPPs, Defined benefit and defined contribution, SSAS, FSAVCs, and annuities.
Self Invested Personal Pension (SIPPs)
A self-invested personal pension (SIPP) is a personal pension scheme that allows investors to invest in schemes that will add to their pension fund. SIPPs can also offer a tax relief, as they have no capital gains tax and no additional income tax. They are normally only suitable for people who have experience in investments.
You may have been misled by the advisor who told you to transfer to the SIPP. An advisor may have suggested transferring to a SIPP as it was better than other personal pensions. They may also have promoted the SIPP using only the tax benefits and not the pension ones. Advisors must also give you certain information. This includes advising you of the risks involved with a SIPP, informing you that HMRC can change the tax rules at any time, and giving you completely clear advice. If you have experienced any of this, then you may have been mis-sold the SIPP and you may be able to make a claim.
Defined benefit (final salary)
A defined benefit pension (also known as final salary) is when you transfer your pension in exchange for a cash value. You must then invest it in in a defined contribution scheme. These include personal pensions, stakeholder pensions, another employee pension scheme and SIPPs.
As with any pension transfers, advisors must make you aware of any risks and costs involved in the transfer. For example, you could have signed up to ongoing advisor fees which were not explained to you. If this has happened to you, then you may have been mis-sold the pension and you may be able to make a claim.
Defined contribution pensions build up a pension pot combining your contributions and your employer’s contributions. Unlike defined benefit schemes, they depend on different factors. These include the amount you put in, the funds investment performance and the choices you make when you retire.
Similarly to other pension types, an advisor must make you aware of all the risks involved with the pension scheme. If they advise you to transfer to this scheme without informing you of all the risks associated with the scheme, and the differences between a defined contribution and defined benefit pension, then you may have been mis-sold the pension, and you may be able to make a claim.
Small Self Administered Scheme (SSAS)
A small self-administered scheme (SSAS) is a type of workplace pension. It is typically set up by company directors for themselves and other key staff members, though it can also be opened up to all employees.
SSAS are flexible as they allow you to choose where and how you invest your money. However, this adds to the risk of the performance and longevity of your pension. If an advisor encouraged you to transfer into this scheme and did not make you aware of all the risks involved, then you may have been mis-sold the pension and may be able to make a claim.
Free Standing Additional Voluntary Contributions (FSAVCs)
A free standing additional voluntary contribution (FSAVC) is similar to a personal pension, with the main difference being that they can be used as part of an occupational pension scheme to add to the pension.
Contributions are paid directly into the FSAVC, and then invested from there. Advisors should tell the investor where their money is being invested. They should also let you know of the differences between an AVC and an FSAVC. If they did not do this then you may have been mis-sold the pension and may be able to make a claim.
Annuities are a type of retirement income product that you can buy with some or all of your pension pot. They are not all equal, and an advisor must take individual circumstances into account when they are selling the product.
Advisors must ensure that they explain the hidden fees in an annuity. They must also give you all the options that are available to you after finding out your personal circumstances. For example, they must find out about your health before they recommend you an annuity. If the advisor failed to do any of these things, then you may have been mis-sold the annuity, and you may be able to make a claim.
How We Can Help with Mis-Sold Pensions
Here at The Compensation Experts, we work with solicitors who have years of experience in dealing with financial mis-selling. This includes mis-sold pensions. Contact us today by filling in our contact form, or by calling us on to speak to one of our friendly, knowledgeable advisors.