F.O.S. one year on !

tenpin189

Financial Ombudsman Service have taken nearly a year to inform me that in there opinion my claim against my pension provider will not be taken up by them, the facts are as follows
1982 took out a pension
1983/84 added another two pensions to add to the 82 one to provide a cash payout off £30000 when I am 65 [25% tax free plus monthly pension; total fund £120000] this I have in writing from the agent who worked for the pension company
When I reached 65 I had a shortfall off £7600, the £30000 was to pay off my mortgage , which luckly I had manage to pay off 10 years ago
Do you think I have a chance of misselling ? and if so who to go to !
Many Thanks in advance
David

turbobob

I've no idea, but my understanding is the 25% Tax Free Cash rule came in with Personal Pension Plans which were introduced in 1988. If you took a self employed pension in 1983/84 it would be a Retirement Annuity Contract (also known as a Section 226 policy), which use a different TFC calculation (3 x pension). So your argument that the agent told you in 1982/83/84 you would have a fund of £120000 at retirement and a TFC payment of £30000 does not really stack up, in my mind, unless they could magically predict future legislation changes

But anyway, if you have had a final decision from an Ombudsman, then you have nowhere to go other than possibly court which could cost you a lot of money if you don't win.

Retired_I.F.A.

Retirement Annuity contracts with their 3* the residual pension as the TFC in them days with interest rates / gilts and thus annuity rates being far higher produced 30-35% of the fund as TFC but I imagine a claim all depends on the written word of the insurance agent at the time.. The FOS I expect have not took it as a g-tee which of course it was not. Had the agent merely said as I would have done: " with todays rates of bonus's you can expect a fund of x from which you can repay the mortgage of y " theres not much hope of a misselling claim and even so compensation may be sero anyway as you could well be in the position your better off now than if you had took a repayment mortgage.(Without doing a massive loss assesment calculation IMO on those figures i'd bet you were better off with the pension)

What exactly do you have in writing from the agent?

dunstonh

I think there are a few issues here.

1 - probably the main issue. The FOS only looks at cases that were applied after 29th April 1988. You bought yours before this. Unless you bought from an insurance company rep who has agreed to consider complaints before that date then its end of the road.

2 - Even if it was an insurance company rep and does fall under the FOS remit, any complaint would follow rules in place at the time of sale. Rules in 1982 were almost non existent.

3 - the 25% tax free cash on retirement annuity contracts only came in during April 2006. As RIFA says, the TFC would have been a lot higher before then (based on data at time of commencement). So, this puts a doubt on your "evidence" that you say you have from the rep that shows 25%. 25% came in with personal pensions in 1988. RACs didnt change to 25% until 2006. So, how have you got paperwork evidence from the early 80s that shows 25%?

4 - Despite a small shortfall, you are almost certainly going to be very much financially better off as tax relief for much of the period was far higher than it is today. This probably more than anything else is likely to be the issue. Just because you have a shortfall does not mean you are worse off.

5 - a pension mortgage is not a mis-sale (nor is an endowment). It is how the recommendation was presented and documented that is the issue.

6 - you paid the mortgage off 10 years earlier. That was before the big tech stocks crash. If the complaint was upheld and a calculation done it would be at the point you cleared the mortgage not now. As it was pre-tech stocks crash you would have been far better off so no redress would be payable.

7 - You probably have guaranteed annuity rates which are far higher than those available today.

tenpin189

Thanks for the replies
Have been in touch with the FSO and it looks like they are going through with my claim
Retired IFA;
The agents wording is as follows;
''Assuming the alterations is effected policies number

---

and

---

together with the enclosed pension mortgage quotation , will provide cover for a mortgage of £30,000''

Retired_I.F.A.

Well that's not a g-tee and presumably the quote that came with it was the norm for the day ie: at x% growth or at todays bonus rates etc so really you dont have a leg to stand on with a claim of misselling.

Frankly if I were the FSO I'd report you to the police for attempted fraud but knowing the FSO you'll probably get a few grand.

dunstonh

I have used phrases like that before and they are acceptable. Usually as they are followed with risk warnings and/or comment about the target growth rate used.

That said, in todays environment you would not use the word "will". "Should" or "could" would be used. But this complaint will be measured by 1980s standards not 2000s.

The problem for you tenpin, even if they do uphold the complaint is that you paid the mortgage off before the tech stocks crash. At that point virtually all endowments and targeted investments were on track for surplus. So the calculation point is not going to be favourable to you,