What to do if you have been mis-sold a pension

What to do if you have been mis-sold a pension

Suppose you are confident that you were misled or got inaccurate financial advice when making investment decisions with your pension. In that case, you are at risk of losing your benefits unless you make a quick claim and get your compensation in time. Here is a short guide on getting compensated when you have been mis-sold a pension.

According to the Financial Conduct Authority, over 60% of Pension holders receive misleading advice on investing their Defined Benefit or Final Salary pensions. Some poorly informed (or dubious) investment guides would advise pension holders to transfer their benefits from their company’s structured pension schemes to alternative Self-Invested Personal Pensions (SIPPs), which are not worth much, or anything at all.

While services like Get Claims Advice are available to help you claim your compensation on mis-sold pensions without losing a chunk of it in the process. Several people don’t even know what these pension schemes are and how they can reclaim their benefits.

What are Pension Schemes?

After retirement, all state or private sector employees are entitled to certain benefits for their work done. But these pensions vary depending on the employer and the circumstances of employment. Here are the three pension schemes in the UK

State Pension

This scheme applies only to over 60 years old and has worked for up to 30 years. They are entitled to the monthly payment of certain sums depending on their National Insurance contributions or have received National Insurance Credits if they had been sick or unemployed.

Defined Benefit Pension

This scheme comes from the amount the retiree had paid into their work scheme while they were employed. It is a severance package derived from the employee’s payment into a pension purse.

Defined Contribution Pension

Depending on how much was paid into this scheme, it is usually the most profitable. The payment here comes from the investment made by the employer with certified pension providers using the employee’s contribution to the work scheme.

All of these pension schemes are funded by the employee or their employer through Pension providers, and they may not be worth as much as the holder wants them to be when they retire. Increasing the pension funds would make some pension holders seek out investment options outside their pension schemes. The investments options available to pension holders include:

Mis-sold pensions happen when investment advisor provides pension holders with inaccurate financial guidance, and they lose their funds after following the pension investment advice.

File A Mis-Sold Pension Claim

When made with pension tips from credible professionals, these investments can be genuinely beneficial, but some investment managers will offer pension advice to invest in unyielding investments.

When you suffer pension losses based on this misleading investment advice, the best way to get your compensation is to file a claim with the Financial Conduct Authority or visit The Pensions Advisory Service – GOV.UK (www.gov.uk)

Get Professional Aid

Getting adequate compensation for your mis-sold pensions may require some professional services. The regulations allow claims from individuals and law firms and claims experts, but your chances of being fully compensated increase with professional assistance.


Is it Wrong to Invest my Pension?

Investing your pension funds is not inherently wrong, but like all investments, it has its risks. For example, some pension investments can end in more losses when made with inaccurate information than you can bear.

Can I file my claim on my own?

While this is not advisable, there is no restriction on whether you can file your compensation claim on your own, or you should have a professional file it. The challenge here is whether you can pull all the stops to ensure the compensation is paid.

Will my compensation be taxed?

Like your pension, mis-sold pension compensation is taxed based on their volume. Therefore, your pension or compensation can be taxed when you exceed a certain amount. However, if your compensation meets the conditions in Section 148 (FA96/S148) of the Finance Act 1996, they will be exempted from taxes.

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