pension mis-sold

lois3132

I have been contacted by a claims specialist,who says I maybe entitled to compensation for a mis- sold pension. I explained I had claimed for my endownment and did not think this was possible for a pension ,he explained this is not the case.I understand that these companies take a % for their service.Can anyone give me any advice

EdInvestor

If you were missold a pension, you can certainly claim compensation.

Perhaps you'd like to give more details?

It may not be necessary to use a complaints handler and give up a big chunk of the money if you are successful.

lois3132

personal pension was started in 1988 with prudential and finishes August 2007.It has been paid into continuously throughout this period.

dunstonh

So what makes that a mis-sale?

Pal

How can someone earn a percentage from dealing with a misselling claim? The only way to get money out of a pension is for the individual to retire.

All they could do is try and transfer it to another policy and claim the commission, in which case they are a scam artist and you should avoid.

ManAtHome

I have a few Pru pension policies - the sales peeps were a bit pushy at times (particularly on using up back-dated allowances), but always had heaps of documentation.

side-note: perhaps I should have listened/fallen for whatever - my potentially over-funded pension wouldn't have been a problem from April (can I get 'em for not forecasting that..? ONLY JOKING!!).

dunstonh

Good point Pal. Harking back to the old pension mis-sale cases, the payments made, when review suggested mis-sale, were all paid into the pension or the person put back into the occ scheme, where one existed and allowed it to go back. You cannot claim compensation directly on a pension.

So, lets just say a pension was mis-sold and the correction was £10,000 and the typical ambulance chaser fee was 25%, you would face a bill of £2500 which you would have to pay and it couldnt come out of the pension.

We were warned at a compliance meeting yesterday that the ambulance chasers would be on the look out for the next thing seeing as endowment complaints will soon be coming to an end. We were also warned that many of these companies would lie and try and create a mis-sale in the mind of the individual even where none existed in the hope that a poorly maintained client file would result in the inability to prove a product wasnt mis-sold even if it wasnt.

I did find it interesting that two warning areas were flagged up for pensions on the FSA watch list.
1 - SIPP sales when stakeholder or pension pension more appropriate.
2 - Income Drawdown on funds less than 100k

What do we see often mentioned by some on here? I know FSA watch lists apply to advice but if advisors are being warned on those two things, that should put the posters here on risk when they see such suggestions on these forums.

I have a few Pru pension policies - the sales peeps were a bit pushy at times (particularly on using up back-dated allowances), but always had heaps of documentation.

Using up allowances, expecially previous years under carryback/carry forward sounds like great advice. People have to be sold pensions as its not something you would do yourself. That pushiness as you call it probably forced you to pay more in than you would have done off your own back and because of that, you will get a better income in retirment.

If over funding is a concern, depending on what you mean by overfunding, you could apply for protection before A day. There are protections in place to allow things valid under the old rules to continue under the new rules. Providing you apply for protection that is.

ManAtHome

My advice was that there were years of service and salary-related limits on what you could draw from the final fund (obvously all changed with A-Day).

I work on freelance basis as a limited company, so pay myself a reasonable salary but not normally the full fees I've charged in any year (need to allow for the odd 'lean' year). Due to this, never had a problem putting cash in the pension - dirt cheap when you knock off tax and employers+employees NI. The carry-back would have been quite substantial due to me being a old (ish) git. Latest forecast from around 6 months ago gives me nearly 2/3 salary at 60 after the tax-free 25% on current annuity rates (assuming 5% growth).

EdInvestor

dunstonh wrote:

So, lets just say a pension was mis-sold and the correction was £10,000 and the typical ambulance chaser fee was 25%, you would face a bill of £2500 which you would have to pay and it couldnt come out of the pension.

Or perhaps the idea is that the person liberates the 25% tax free cash, which after April anyone over 50 can do without needing to take a pension, and pays the fee out of that.Compo gets paid into pension to replace the TFC.Quite neat

We were warned at a compliance meeting yesterday that the ambulance chasers would be on the look out for the next thing seeing as endowment complaints will soon be coming to an end.

WP bonds and contracted out pensions are next I have heard.The latter has been flagged for some time, and the FOS has already found in favour of several cases of the former.

...in the hope that a poorly maintained client file would result in the inability to prove a product wasnt mis-sold even if it wasnt...

It was interesting what you said the other day DH about the DPA-related destruction, hadn't heard that before. Karma, you might call it.;)

I did find it interesting that two warning areas were flagged up for pensions on the FSA watch list.
1 - SIPP sales when stakeholder or pension pension more appropriate.
2 - Income Drawdown on funds less than 100k
That should put the posters here on risk when they see such suggestions on these forums.

No: the providers mentioned here are all execution only.

The FSA really ought to be paying more attention to equity release-related misselling and the persistent failure of oldies to get the point about the open market option for annuities (thanks of course to the lifecos), rather than drawdown.

If posters stay away from insurance company SIPPs they should be OK

whiteflag_3

No: the providers mentioned here are all execution only.

Agreed, but its ok for amateurs to push SIPPS on this site while the FSA draws up its battle plans to nail professional advisers!

The FSA really ought to be paying more attention to equity release-related misselling and the persistent failure of oldies to get the point about the open market option for annuities (thanks of course to the lifecos), rather than drawdown.

Utter rubbish- have you seen the info that goes out with retirement packs from Lifecos these days? (dont expect you to answer this). You would have to be blind to miss that at an open market option is available.

Ironic that this site is full of praise for "pay your mortgage off early brigade" ,all heading to be property rich, income poor through a lack of balanced financial planning. All going to be forced into equity release as their only option.

If posters stay away from insurance company SIPPs they should be OK [/

QUOTE]

If posters ignore sweeping statements like this they should be OK

ReportInvestor

whiteflag wrote:

have you seen the info that goes out with retirement packs from Lifecos these days? (dont expect you to answer this). You would have to be blind to miss that at an open market option is available.

What percentage of people do take up the open market option? It's still far too few. 1/3? or something really daft, I think.

I wonder which aspect of the FSA's guidelines on the LifeCo packs does most to put people off?

"Open Market Option (OMO)

Given the significant differences possible between annuity rates, and the no going back nature of the decision, where a member of an individual pension approaches retirement the pension provider must:

Explain that, by shopping around, consumers may get a better deal in retirement;
Explain the open market option, including the fact that there is not necessarily one best company or product for all individuals in all circumstances; and
Include a brief explanation of how to make use of this option, including the desirability of taking advice.