Pensions 101: Types of Mis-Sold Pensions & How To Avoid Them
Insurance companies have been slapped with massive penalties over the year. Mostly for failing to identify and compensate people duped into purchasing pensions by consultants. However, the industry has made significant progress since then. Although some experts believe that mis-sold pensions are on the increase once again.
Here are some typical forms of mis-sold pensions to watch out for. As well as steps you can take to prevent them.
Mis-Sold Pensions Types
Final Salary Transfers
These happen when a person’s last pay was paid before retirement. While their employer proposed a transfer to workplace pension schemes.
You run the danger of losing all of your money in your present pension fund.
Self-Invested Personal Pensions (SIPP)
SIPP does not necessarily pose an issue straight away. They are, in fact, a terrific option since they allow you to take charge. Plus, they can offer you complete control over what you do with your pension.
The problem is that they might be part of a group of high-risk investments. Which usually come with a low return accompanied by hefty annual fees.
Small Self-Administered Schemes (SSAS)
An SSAS is a pension plan often sold by non-regulated parties, including product suppliers and sales agents. A financial adviser promotes pension investment strategies. They then place their targets at higher risk of losing all of their hard-earned money.
Top Signs of a Mis-Sold Pension to Watch Out For
An Inexperienced Advisor
Your adviser should have an appropriate degree and must demonstrate that they have completed a trainee program. They should have also passed it under the company’s rules.
Failing To Explain Fees, Terms & Conditions
Your financial advisor is responsible for communicating the terms and conditions of the pensions plan they are offering to you. Suppose it turns out that your pensions advisor fails to communicate any terms and conditions to you after you made a choice.
Regarding related fees, the primary concern is these unexpected fees or charges. They may result in individuals spending more than their pension generates.
Your Consultant Advised A Pension or Investment That Was Too Risky For You
Your pensions advisor must work with you to determine an acceptable amount of risk. If you believe that communication in this area is inadequate, you may be entitled to a pension mis-sold claim.
You Were Encouraged To Move Your Workplace Pension Scheme
Transferring your pension from an employee pension scheme is seldom helpful to you or your finances. If you have been encouraged to withdraw your pension from the guaranteed savings, there is a significant probability you have been mis-sold.
Filing a Mis-Sold Pension Claim
If you are submitting the claim yourself, visit the Financial Ombudsman Service website. Then, submit your application.
You may submit a complaint with the Financial Ombudsman Service. However, you must first complain to the person against whom you are making the accusation.
Luckily though, if the pension provider who mis-sold a pension has gone bankrupt, you may be eligible to file a claim. Especially if you received poor pension advice.
Nevertheless, if you believe you have invested in any mis-sold pensions, you will need various information. Quickly identify them to file any mis-sold pension claims.