A pension is a person’s lifeline for retirement. It’s their way to ensure that they (and their loved ones) can be looked after and allows people to enjoy their remaining years.
However, it is a hugely complicated subject which can result in fatal errors, either because people receive advice from someone who isn’t suitably qualified and authorised, or because they simply receive the wrong advice. Thankfully help is on hand for people who think they were given bad advice and are looking for compensation.
Mike Begg at Beat the Banks is offering free checks to anyone who feels they might have been wrongly advised to move their work defined benefit pension (sometimes known as a ‘final salary pension’) to a different scheme in the past 10 years.
He explained: “Pensions can be complicated and difficult for people to understand, which is why they rely on advice from so-called experts.
“However, sometimes people are given advice that is more in the advisor’s interests than their own and they wind up moving a good pension to a pension that could leave them without money in later life.”
According to Mike, who has decades of experience in the financial sector, there are few valid reasons why moving a defined benefit pension somewhere else is a good idea.
“With a DB pension, you have benefits and guarantees that you don’t get in other pension schemes, including the fact that the stock market doesn’t affect how much you receive and it’s guaranteed income for life.
“But as soon as you leave the scheme, you lose all of that, which is why it shouldn’t be recommended, except in exceptional circumstances.
“If it was your only or main pension, if you were younger than 55 or if you have no real knowledge or experience with financial matters, you shouldn’t have been advised to make the move.”
Mike added that the reason why some financial advisors recommend this kind of move is short-term thinking.
“Some people think that by moving they can free up some of the money they have invested in their work pension to use now. But that can leave them short as they reach their later years, when that money is really needed.
“Depending on where and how the money is reinvested, it can also offer the advisor a higher commission, plus you would then have to keep paying them to administer your pension – sometimes they end up with more money than you do!”
But, for those who have been wrongly told to move their pension, there is hope that they can receive some form of compensation.
“Depending on who is paying the compensation, and when the mis-selling happened, you can receive up to £350,000 back,” Mike explained. “Recent victories we’ve had included one client settling for £191,000 with Standard Life, and several clients have received £85,000.”
To find out more about defined benefit pension mis-selling, and how Mike and his team can help you, visit the Beat the Banks website.
Disclaimer: Beat the Banks are authorised and regulated by the FCA – FRN 832771
You don’t have to use the services of a regulated claims management company, you can make a complaint yourself for free direct to the firm or the individual who you believe mis-sold the financial product.If your complaint is rejected, you may be able to refer the matter to the Financial Ombudsman Service free of charge. If your complaint relates to a firm or individual that is no longer authorised by the regulator and/or has ceased trading, you may be able to claim compensation for free from the Financial Services Compensation Scheme.