With the current rise in the cost of living, having a pension plan is important. Unfortunately, over the years thousands of UK citizens have incurred a significant amount of losses through investing in Self-Invested Personal Pensions (SIPP) and Small Self-administered Schemes (SSAS). This is because of the huge range of mis-sold pensions.
Wondering if you have a mis-sold pension? Here’s how to know if you have a mis-sold pension.
Insufficient Information On Terms and Conditions
Fees and Charges Not Properly Disclosed
Some pension holders are encouraged to purchase certain types of pensions only for the financial advisor to fail in providing the attached fees and charges. Sometimes, you may have to pay more fees than what you earn from your pension.
Your Advisor Wasn’t As knowledgeable
Prospective SSIP holders are inclined to ask for financial help because they lack the financial literacy to make certain crucial financial decisions. Therefore, it makes sense to use experienced financial advisers. An excellent financial consultant uses their years of experience and financial education to guide you in the right direction in selecting the best product. In that case if you invested in a pension scheme based on the advice of a financial consultant only to realize that they weren’t as proficient, you may qualify for compensation. Before engaging with an adviser, ask for their certificates and also as for their experience on QROP, SIPP claims, SSAS and mis-sold annuity.
An Investment or Pension of Higher Risk
Some people think if their investment or pension performs less well than expected, it is automatically counted as a mis-sold pension. However, a low-performing pension will only be a mis-sold pension if the consultant has not adequately prepared the client on the risks. Most unpredictable investments are favoured by investors with high risk tolerance. However, if you want to be on the safe side, avoid fluctuations and make sure the funds are protected. This usually targeted on individuals waiting for a final salary pension transfer. It is advisable to work with a defined benefit pension option in order to stay safe and also avoid mis-sold annuity.
If a financial advisor recommends a product and does not warn about the associated risk, it may be considered as mis-selling. In addition, if the advisor promises a specific result, and it is not achieved, the pension may be mis-sold. There should be a clear defined benefit pension.
Transfer of Money from a Workplace Pension Into a Different Scheme
Some employees are encouraged to transfer funds from occupational pensions to another pension plan. Although all cases are different, this can be considered a bad decision. You may be better off depositing money into your employer’s pension system. You should also familiarize with the QROP policies and conditions in case you are working overseas. Also ask about final salary pension transfer and annuity claims.
Workers most exposed to such abusive sales of pensions include government officials, railway workers, teachers, police, firefighters, NHS personnel, or armed forces. Most times, these workers are advised to transfer to SIPP pensions as they are better than traditional pension.
Unfortunately, mis-sold pensions are a recurrent problem in the UK. However, this can be avoided if you know what to look out for. If you think you have a mis-sold pension, please get claims advice on SIPP claims and annuity claims. Also, follow up with the relevant authorities on the matter.