Bad pension advice could lead to you losing some of your hard-earned pension savings. It could be given intentionally, or accidentally, but the result is typically the same. Your pension funds should work hard for you, in a way that helps your money to grow so that you’ll have what you need for your retirement.
If you’ve received bad pension advice, you could be entitled to compensation of up to £85,000. You’ll claim this from the Financial Services Compensation Scheme if you’re eligible. You’ll need to make a claim for bad pension advice you’ve received.
If you’ve been encouraged to take a product that’s not suitable, you could find that you’ve lost out financially.
Read on to learn more about making a claim for compensation for bad pension advice.
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Usually, people get bad pension advice when transferring from one product to another. Transferring your pension is something you should do with knowledge and full consideration. If you’ve been given bad pension advice, you may end up with a product that doesn’t suit your exact needs.
Many people move their pension funds at least once through their lives. Many move their pension funds more often. The best product for your needs could change with your lifestyle, your income or any future plans. There’s nothing wrong with transferring, but only if you know what you’re doing.
Bad pension advice may mean that you lose money. Your pension product might be unsuitable or could come with risks that you’re not prepared for.
If you’ve been given bad pension advice, the money that you lose could have a big impact on how prepared you are for retirement, and could leave you with having to make sacrifices to your quality of life.
The best way to avoid bad pension advice is to seek advice from several different sources. Make sure that you work with financial advisors that are FCA approved. Never leap into the first product you see advertised, and always make sure that you know all the risks and the details that are written into the small print. If you feel like a product isn’t clear to you, ask for more explanation.
A good pensions advisor will take plenty of time to learn about your unique circumstances. They’ll consider your financial goals, and give advice about several different products. Don’t rush, as a pension transfer is a complex decision.
According to official statistics from the Financial Conduct Authority and the Pensions Regulator, 180 people reported scams and bad advice to Action Fraud in 2018. And in the period 2015-16, 8.4 million consumers were offered unsolicited pension advice or reviews.
Meanwhile, it is estimated that there are eight scam calls made every second related to pensions. These statistics show the scale of the issue – with trillions of pounds potentially at risk if consumers follow bad pension advice.
If you’ve already been the victim of bad pension advice, you deserve to get your money back. Saving for retirement isn’t easy, and losing your money can leave you with a future you hadn’t planned for.
You can claim compensation if it’s decided that you were mis-sold a pension product. You’ll claim this through the Financial Services Compensation Scheme (FSCS). Depending on your situation, available compensation can be up to £85,000 in value. Compensation could right some wrongs and help to bring your pension fund back to its original level.
If you’ve been given bad pension advice, you can choose to seek help with your claim or to go it alone. Making a claim on your own is no doubt cheaper, though you may be less likely to be successful without the legal expertise. If you’re going to claim on your own, you should be confident that you can explain how you’ve been given bad pension advice. You should make sure that you can explain exactly what you’ve lost and how.
If you’d like to use some professional help, you can find a solicitor or a financial advisor. Seek an independent financial advisor that’s reputable, and FCA approved. Using a financial advisor or solicitor will usually improve your chance of a successful claim.
When it comes to claiming compensation for bad pension advice, there is no standard timeframe. Industry experts suggest the average claim will be resolved between 16 and 14 weeks, but this may be significantly longer or significantly less.
This is why many people seek the assistance of claims management companies to ensure that their case is presented in the strongest possible manner. These companies also have experience when it comes to avoiding delaying tactics and maximising your compensation.
Remember, while you may be entitled to compensation for the financial consequences of bad pension advice, you may also be entitled to non-financial related compensation for pain and suffering.
As soon as you become aware that you’ve received bad pension advice, you should set the wheels in motion to make a claim for compensation. Officially, you have three years to claim from the date that you recognised the problem.
In total, you’ll have a maximum of six years to make your compensation claim. After this, you can’t claim for lost money, although you should still report the incorrect advice.
Not reporting bad pension advice means that it could be given again. No doubt you’re not the only one to lose out financially because of the bad advice you’re given. By reporting bad advice to the Financial Conduct Authority, you can help to reduce the number of bad pensions advisors that are working.
£85,000 is the maximum compensation for any FSCS claim. You may not receive the full amount of money but could get a smaller amount. The amount of compensation you receive will depend on how much you’re thought to have lost as a result of bad pension advice. That’s why it can help to work with the experts that can place a proper value on your loss.
Compensation may be paid for financial and non-financial loss. Financial loss is the money you lost as a result of bad pension advice, whilst non-financial losses can be covered to address the emotional impact. You may receive compensation for non-financial loss if you can show that the issue distressed you.
No. Under normal circumstances, any compensation you receive as a consequence of bad pension advice would be tax-free. There may be some fairly unique scenarios where a taxable event may be triggered, but these are few and far between.
Sometimes pension funds decrease in value, and there’s nobody to blame for the loss. Pension funds come with risks, and investments can go up or down. Losing money doesn’t necessarily mean that you were given bad pension advice.
Telltale signs of bad pension advice include an advisor not checking that you fully understood what was on offer, an advisor not providing a range of options or a sense that you were pushed in the direction of one specific product. If advice didn’t feel impartial, or you weren’t told of the risks, you likely received bad advice.
Speak first to the pensions advisor, to see what they say about the issue. They may offer a solution you’re happy with, avoiding the need for escalation. If you don’t receive a response at all, or if the response is not acceptable, you should escalate your claim for compensation through the Pensions Ombudsman.
Contact the Pensions Ombudsman to make a complaint about bad pension advice. This is an independent and free service, looking at both sides of the story. If your complaint is upheld, further action can be taken.
Keep records of all communication with anyone involved in the complaints process. Record all attempts to contact your pensions advisor, as well as any responses you receive. Remember that if you’re choosing someone else to complain on your behalf, it’s especially important to choose a company that’s reputable and FCA registered.
If you’ve been caught out once, you don’t want the same to happen again!
As we touched on above, you can pursue your own pension mis-selling compensation with no legal advice and representation required. However, many people choose to employ the services of a claims management company to minimise the timeframe and maximise compensation.
If you have a relatively strong case for compensation, there is every chance they will offer you a “no win no fee” arrangement, although they will likely request a success fee. The success fee would be a percentage of any compensation received.
When looking at any form of compensation, there is a general misconception that just because the victim has died, their claim is null and void. This is simply not the case. As the vast majority of pensions are transferred in some shape or form on the holder’s death, this could have a significantly detrimental impact on their partner’s life and finances.
It matters not whether you receive the pension fund directly; if your deceased partner was given bad pension advice, then you can still claim for damages. In some scenarios, it may be a little more complicated as the individual is not around to confirm the details, but there should be a paper trail when it comes to financial advice.
This is yet another grey area that has no doubt seen many cases of pension mis-selling fall by the wayside. Whether or not you agree with the advice given, if the advice turns out to be incorrect or not appropriate for your situation, it matters not whether you agreed. You only agree to the advice you were given, and therefore the individual who gave you that advice could be deemed liable.
If you can prove their advice was inappropriate and they were liable for the outcome, then you should be able to claim compensation. Each pension mis-selling case that is not pursued means that potentially liable parties will not be held to account - increasing the chances of this happening again in the future.
Here at Money Savings Advice, we have partnered with some of the UK’s leading Financial Claims management companies. They have already helped thousands of people claim compensation for a mis-sold pension and they can do the same for you.
Choosing an independent claims management company means they won’t proceed with a claim unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these claim management companies who can help you make a compensation claim, then click on the below and answer the very simple questions.
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