Mis-sold SIPP Pension Claims

Miss sold SIPP pension claim experts.

Research suggests around one third of all UK pension transfers have been miss sold SIPPS. 

Clients have been advised to transfer their defined benefit or workplace pensions into a SIPP (Self Invested Personal Pension) which was not always in their best interests.

SIPPs tend to be exotic, non-standard high risk investment products like overseas property, car park schemes, storage pods, forestry, eco projects, antiques, wines and bio fuels.

So what does a miss sold sipp pension really mean?

These are challenging times and let's be honest the stock market has hardly been favourable to savers and those with pensions in recent years. As we all look to maximise our finances, it's not surprising we look for advice on how to make our money work harder.

However, we have every right to expect that advice is honest and in our best interests, not unsound. And this is where miss sold sipp pensions and mis-managed pensions come into play. Check out our list here of companies and Advisers that are either under some kind of investigation or have gone into default with the FSCS. 

The first thing to acknowledge is that just because your pension pot has lost money, it does not mean you have a miss sold pension. Unfortunately, investments can go down as well as up. But any Financial Adviser had a duty of care to ensure and pension transfer advice offered was in your best interests, suitable for your current and future situation, plus was acceptable to your appetite to risk.

In 2018 the Financial Conduct Authority (FCA) carried out a survey of Final Salary Pension transfers and, based upon the cases which they reviewed, concluded that it was extremely likely that the advice received from financial advisers was unsuitable and the FCA requested data from every firm. During their investigation, the FCA found that less than 50% of pension transfer advice was suitable, leading to thousands of people losing money and benefits. This applied to both private pensions and SIPP schemes.

If you worked for any Government department, local council or corporation (inc Police, Military, NHS, Council, Coal Board, British Steel, Railway, British Telecom etc) and had a final salary pension or defined pension it is highly unlikely that any transfer out of that pension scheme was in your best interests. Not just losing pension fund value, but also the scheme benefits. 

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Typical Scenario. This is not a real case but is very typical of a client's miss sold sipp pension complaint. Sound familiar?

Mr Jones has worked for XYZ business for 30 years. Over the 30 years he paid in say 5% into a final salary pension scheme and XYZ business matched his 5% ready for retirement at 65. At 55 he is 10 years away from retirement and the stock market isn't doing so well. Pension freedom rules now allow for him to take part of his pension pot and re-invest it somewhere else. (in some cases this could be a private pension or some investment saved up whereby all of the money could be transferred). A Financial Adviser recomends moving the funds into a SIPP (Self Invested Personal Pension) offering more flexibility and higher returns usually around 7%-15%. This sounds very attractive. Unfortunately, the investment is in a high risk scheme like overseas properties or rain forests (see below for more examples), a risk far greater than Mr Jones wanted or should have been exposed to. Plus by transferring funds out of his existing pension scheme he loses some, or all of his guaranteed benefits like a final salary bonus. None of the costs of the transfer, the risks involved nor the consequesnces were explained to Mr Jones. Two years from retirement Mr Jones comes to review his pension plan expecting to see a substantial upturn in his pension value, only to find the overseas property scheme his pension funds were invested in went bust in the recession. His pension pot has gone, his benefits gone and now he has little left for retirement.   

Probably not, but in some cases in can be to your advantage. It's usually a balance between weighing up the pension benefits and investment risks.