Saving for a secure retirement is the perfect idea and something most people will try and do at some point over their working life. However, what consumers weren’t always made aware of is that a Pension is just another form of investment which means there is a certain amount of risk involved alongside any potential reward.
What is a Pension Transfer?
As obvious as it sounds, Pension transfers are when a current Pension is transferred to a new Pension scheme with the aim of better returns. However what isn’t as obvious is that people are not being made aware of the risks that are involved with transferring.
Clients may have been approached, encouraged or misadvised to transfer from their current Pension into a poor performing alternative. A common form of Pension transfer is from an Occupational Pension Scheme (OPS) to a Personal Pension Plan (PPP). Transferring from an Occupational Pension Scheme to a Personal Pension Scheme is a common type of Pension mis-selling which is why it is crucial for people to be aware of the danger.
Mis-Sold Pension Transfer: How Can It Happen?
Since the Pension mis-selling scandal began in the late 1980’s, it is estimated that over 1 million people may have been affected (1). Many would have been misadvised and encouraged to transfer from an Occupational Pension Scheme to a Personal Pension Plan, despite the fact they would have most likely been financially better off keeping the original policy.
Many have already received compensation, leading to a tightening up of regulation about Pension selling, yet many clients are still unaware or yet to take action. From our experience we have found the most common reasons for Pension Transfer mis-selling are:
Unjustified additional costs being incurred
Your attitude towards risk & your personal circumstance not being fully taken into account The benefits of the Occupational Pension Scheme were not compared to the new Personal Pension Plan in a balanced way
The importance of having regular reviews not being fully explained to you or inadequate reviews being set up
If you think any of the above might apply to you or your current policy, or think you might have been misadvised into leaving an Occupational Pension Scheme to take out a Personal Pension Plan, then it is likely that you have been mis-sold a Pension Transfer.
To find out how you can take action get in touch with one of our experts for a free assessment to understand if you have been wrongly transferred and would be entitled to make a Pension Transfer claim. Alternatively, fill in a web form for us to contact you at a time most suitable to you.