Are You a Victim of a Pension Transfer and Lost Money?

Ian Lewis[1]

Ian Lewis

Money Savings Advice Guide to pension transfer victims

If you’re transferring your pension, you might speak to a pensions advisor that will help you find a suitable pension. You should learn about pension options that you’re best suited for. Some advisors may provide the wrong information about pensions, so you might be sold an unsuitable pension product.

If you’re a pension transfer victim, mis-sold a pension transfer, then you’re not alone. The wrong pension transfer could mean that you lose money that you’ve saved for your retirement. You may be able to make a claim.

With the wrong pension product, you could lose money that you’ve worked hard to save for your retirement.

Read on to find out more about what to do if you’re a pension transfer victim.

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Why Transfer a Pension?

Like many financial products, pensions vary in quality and suitability. What works for one person isn’t right for another, and the best pension for your needs might change at different points in your life. Many things can impact pension suitability.

The goal with your pension is to maximise the money that you have saved up for retirement. One day, when you stop working, your pension will provide ongoing income. You’ll want to make the most of your pension savings, which will require you to find the best products.

Sometimes, the best way to make the most of your pension is to move from one product to another. You might switch to a different investment or a completely different pension fund provider. You might also swap to a different pension type, to help maximise your retirement savings.

Who Can Be a Pension Transfer Victim?

Most people aren’t experts in investments and financial management. Yet, almost everyone will have some pension savings. That means that most people can benefit from speaking to a pensions advisor. Sadly, pensions advisors aren’t infallible either.

Bad advice can cause harm to your pension savings, leaving you with far less money than you might otherwise have. Almost anyone can become a pension transfer victim.

Research commissioned by the Project Bloom group of agents found that some people had lost up to £1m in various pension scams with an average loss per victim in 2017 of £91,000 per person.

These huge sums show the dangers of falling victim, which could wipe out the funds you’ve worked hard to build up during your working life.

How to Identify if You’re a Pension Transfer Victim

You might be a pension transfer victim if you were mis-sold a SIPP. A SIPP, or Self Invested Personal Pension, is best suited to experienced investors. SIPP products must be carefully managed to take advantage of the large potential gains, which means that these pensions are only really suitable for people that know just what they’re doing.

SIPPs come with big risks, so you may have been mis-sold your pension if the risks of these products weren’t emphasised.

You might also have been a pension transfer victim if you’ve used a Defined Benefit Pension Transfer or DB. You might also know this as a Final Salary Transfer. You may have been advised to transfer away from a pension that guaranteed a specific annual payment, and if that’s the case, then it’s very likely that you’ve lost both money and financial security.

Defined Benefit pensions are extremely hard to get hold of, and you may have given up a much sought-after financial product.

You’ve possibly been a pension transfer victim if an advisor has been vague with their advice. They may not have made sure that you fully understood the risks and benefits of moving your pension. Some advisors might push certain products, rather than explaining the full choice of available pensions.

Other Ways to Be a Pension Transfer Victim

Pension transfer scams are a very big problem, and surprisingly easy to fall for. You shouldn’t be embarrassed if you’ve been swept up in the promise of a great financial outcome.

Every year, many people are pushed into transferring their pensions to scammers. They’ve promised a great new fund that brings lots of benefits, then they move their money and could end up losing every single bit of it.

You might have been a victim of a pension transfer scam if you’ve been encouraged to invest in property or other high-risk products like storage or renewable energy. Moving your money should only be something you do when you’re sure that it’s safe. Sadly, pension scammers can sound very convincing as they make you give away your hard-earned savings.

If someone’s guaranteeing better returns, suggesting loopholes or using high-pressure sales talk, there’s a good chance that you’re about to be a pension transfer victim. You can make sure that you’re doing the right thing by separately contacting an FCA-approved financial advisor. Anyone that’s responsible, and acts within the law, will be happy to wait whilst you consider your options and speak to someone else for advice.

When Are You Not a Pension Transfer Victim?

Pension values can rise and fall, and your move won’t always be the best. This doesn’t necessarily mean that you were mis-sold your pension transfer.

If your advisor gave clear information about the range of products you could choose from, considered your individual circumstances and talked you through the risks of each product, then you haven’t been mis-sold a pension transfer.

If you were told about all fees and charges, as well as given access to the full product terms and conditions, then it’s likely that you were sold a pension transfer properly.

Protecting Yourself From Becoming a Pension Transfer Victim

Never make a pension transfer decision straight away. Ask for documents that you can take away, and time to consider your options. Then, speak to other people, including independent financial advisors.

Nobody should rush you into any decision about what to do with your pension. A few days, weeks or months won’t make a big difference.

If something sounds too good to be true, it’s very likely that it is. Theft of money from pensions is a very real problem for many. Often, though, it’s not outright theft that you should watch out for. Often, pension transfer victims aren’t targeted by scams but advised by those with limited experience.

Many advisors aren’t stealing your funds but recommending that you transfer to unsuitable products where you’ll lose your money far less directly.

What to Do if You’re a Pension Transfer Victim

You have the option to make a claim if you believe you’ve been a pension transfer victim. You can make an independent claim or get help from a financial advisor.

If you choose to go it alone, you can make a claim through the Financial Services Compensation Scheme (FSCS). With specialist help, you might have more chance of your claim being successful.

When to Make a Claim

If you’ve been mis-sold a pension transfer, you do need to act fairly quickly. You’ll have to make your claim within six years of the pension transfer. If you notice something’s wrong soon after the transfer, the clock starts ticking straight away. From the moment you realise your pension transfer was mis-sold, you’ve got three years to take proper action.

What to Do Now

If you believe that you’ve been scammed or mis-sold a pension transfer, contact the Financial Conduct Authority. The FCA can accept your report and launch an investigation.

Should You Appoint a Claims Management Company to Pursue Your Claim?

At first glance, many people wonder why they even need to appoint a claims management company when there is already a claims process in place. The truth is that pension transfer/lost money compensation claims can become complicated.

There can be knock-on effects to different areas of your investment portfolio, reduced pension pot going forward and in some cases, damages for pain and suffering. The regulatory framework, when claiming compensation for inappropriate advice/lost money is relatively rigid.

As you will find when going through a claims management company, there are often other factors to take into consideration.

Money Savings Advice Tip

If you feel you have been the victim of pension fraud and have lost out financially, you could be entitled to compensation. Our tip is to speak to a professional who can help you understand the process of claiming compensation and can look after the compensation process on your behalf.

Do You Need to Prove Negligence on Behalf of a Third Party?

When claiming compensation, it is up to the claimant to prove that the defendant was negligent in some shape or form. It is only by proving the negligence that you can actually move on to claim compensation for, in this case, pension transfer advice or lost money.

How Much Does It Cost to Go Through a Claims Management Company?

This is yet another area of confusion which the claims management industry is trying to address. There is a common misconception that it is relatively expensive to pursue compensation via a claims management company. The truth is that prior to taking on your claim, the claims management company will review all of your evidence.

If they believe you have a minimum 60% chance of success, then they will likely take on your case under a “no win no fee” structure. This effectively indemnifies the claimant from costs incurred by the claims management company when pursuing their case.

What Is a “Success Fee”?

In exchange for offering a “no win no fee” arrangement, your claims management company will look to negotiate a success fee. This is effectively their payment/reward for a successful prosecution and consists of an agreed percentage of any compensation. The average success fee tends to be around 25%, but it will vary from case to case.

Can You Claim Additional Damages?

This is where claims management companies can come into their own, identifying additional pension damages. For example, if a pension transfer resulted in a significant reduction in your pension fund with a knock-on effect on your lifestyle, you may be able to claim additional damages for pain and suffering.

These are issues which you can discuss with your claims management representative and issues which are not always addressed with the more formal regulatory complaints process.

Why Is the “No Win No Fee” Arrangement So Important?

If you were to pursue a financial compensation claim for an inappropriate pension transfer/lost money without a “no win no fee” arrangement, then you would need to cover all costs yourself.

As a consequence, many people would prefer to use the more basic regulatory complaints procedure which does not always encompass the wider impact on your finances and life. Indeed, where the initial claim may be deemed borderline, some victims may not even pursue compensation.

However, the “no win no fee” arrangement ensures that all negligent parties can be held to account and has prompted many parties to change their business strategy/services as a consequence.

How Can Money Savings Advice Help You With Making a Mis-Sold Pension Claim?

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.


Money Savings Advice Author Ian Lewis

Ian Lewis

Ian Lewis is one of our specialist financial writers. Ian has over 15 years of financial writing experience, having worked for some of the largest financial publications in the UK covering topics from mortgages, equity release, loans and financial claims, to name a few.

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