been mis-sold contracted out of serps pension

wedgehead

About 20 or so years ago .. I was railroaded into taking out a contracted out of serps pension ..let me explain
i worked fulltime and had company pension .. but a financial advisor from a pension company kept phoning me .. even at work .. to take out a pension with them . she was given my number by a friend .
this person then turned up at my house and wouldnt take No for an answer .. so for easy life I signed up to stop the hassle .. I also had to give her 10 peoples names and numbers for her to contact .. she made out she was doing me a favour .. i was even driven to bank to make sure i had set it up ..
anyway after she had gone i stopped direct debit , and thought that would be end of it .. but every year i got statements showing it was running .. even though i had not payed anything in , i was still contracted out of serps .
I have noticed companys on the net offering to get compensation if you have been mis sold a contracted out of serps pension .. Are these companies any good .. they say they dont charge you , they get money from other side .. is this true .. is it worth using such a company ...any advice would be appreciated thanks

jem16

wedgehead wrote: »

i worked fulltime and had company pension ..

You need to clarify a few things first. What happened to that company pension?

anyway after she had gone i stopped direct debit , and thought that would be end of it .. but every year i got statements showing it was running .. even though i had not payed anything in , i was still contracted out of serps .

Contracting out of SERPS would not have seen you making any contribution. That would come from HMRC in the form of a NI rebate.

CannySaver_2

Hi

First of all, before you start to look at these companies take a step back.

Why do you think opting out of SERPS was bad advice? You may well be better off, you will certainly have more flexibility when you come to retire e.g. tax free lump sum will be available from your protected rights fund, you will be able to take it from 55 if you wish and won't have to wait until the state retirement age etc.

Hard sales tactics are not nice, and driving you to the bank would seem extreme, but it doesn't necessarily mean you were missold.

I'd find an IFa to help you, www.unbiased.co.uk is a good place to start, have a chat with them, if necessary engage them to look at whether you have a complaint, shouldn't be too costly to work out and then if you have a complaint make it to the company who sold you the pension, or whoever owns them now. If they decline the complaint and you still think you have a case you can ask for it to be referred to the Financial Ombudsman for a final and binding decision.

Don't go to tiresome ambulance chasers who don't care about you and will take a percentage of anything they get for you as their fee.

The Canny Saver

wedgehead

the company pension .. i still have .. it is no longer being added to as I no longer work for that particular company that too was about 20 years ago .. At present I have a company pension with my job that im with now , been there about 18 years .. I also have details on my old company pension and also the private pension (contracted out of serps ) both these old ones are no longer contributed too by me ..
confused about the contracted out of serps pension .. Firstly I never paid any of my own money into it ..but I used to get statements showing money was in there .. when I enquired I was told cos you have contracted out of serps .. confused ..
Secondly as far as i know I have never had a NI rebate .. Or could it automatically go into contracted out of serps pension without me knowing

jem16

wedgehead wrote: »

the company pension .. i still have .. it is no longer being added to as I no longer work for that particular company that too was about 20 years ago ..

What kind of compnay pension was it? If it was a final salary pension you were already contracted out of SERPS.

At present I have a company pension with my job that im with now , been there about 18 years

Again - what kind? Money purchase or final salary?

confused about the contracted out of serps pension .. Firstly I never paid any of my own money into it ..but I used to get statements showing money was in there .. when I enquired I was told cos you have contracted out of serps .. confused ..
Secondly as far as i know I have never had a NI rebate .. Or could it automatically go into contracted out of serps pension without me knowing

Contracting out means you pay less NI than if you were contracted in. The difference is paid as a rebate direct to the pension.

wedgehead

To be honest I have no idea what kind of pension the old company pension was .. I had already had this going when i was advised to take out a seperate private pension ..can you have 2 pensions at the same time ..
The pension i have now is a final salary company pension .

jem16

wedgehead wrote: »

To be honest I have no idea what kind of pension the old company pension was .. I had already had this going when i was advised to take out a seperate private pension ..can you have 2 pensions at the same time ..

20 years ago you could not have an occupational pension as well as a personal pension. Nowadays you can. Chances are that it was also final salary as a lot were 20 years ago. Do you get a statement every year?

The pension i have now is a final salary company pension .

Then you are already contracted out through this.

wedgehead

The old company pension and private pension .... i havent had statemnet for years .. i have only just tracked them down .. as i had moved lots of times and also had change of name ... but surely all though years ago the financial advisor from the private pension company would not have allowed me to take out another pension if it was illegal

jem16

wedgehead wrote: »

The old company pension and private pension .... i havent had statemnet for years ..

What company did you work for?

but surely all though years ago the financial advisor from the private pension company would not have allowed me to take out another pension if it was illegal

May have been different depending on the type of company pension - I don't know.

dunstonh

I have noticed companys on the net offering to get compensation if you have been mis sold a contracted out of serps pension .. Are these companies any good .. they say they dont charge you , they get money from other side .. is this true .. is it worth using such a company ...any advice would be appreciated thanks

No. These companies are generally a disgrace.

The FSA did a review of contracting out some years ago and found that just 1.5% of people who contracted out between 1988 and 1997 were potentially mis-sold. The FSA created a few consumer guide with a flow chart in it to see if you were mis-sold. It was a very simple flow chart that effectively lead to the fact that if it was a contracted out occupational pension then you had no choice. So, you could not be mis-sold. Or if it was a personal pension and you were under the age of 45 at the point of contracting out then you were not mis-sold.

These companies on the web appear to fall into a couple of camps.
1 - those that look for an upfront fee and put in a hit and hope complaint. When the complaint is rejected, they keep the up front fee.
2 - those that try to draw you in saying they will look to see if its mis-sold but will also do a review of your pension. Typically these ones do not make an explicit charge for the complaint. They will either put in a hit and hope complaint and tell you that they can transfer the pension to somewhere else or they will tell you that you were not mis-sold but they can transfer it somewhere else (typcially earning around 5% commission in the process). The complaint is largely a fake reason for them to get to refer your pension to an IFA to earn commission. Another poster who handles complaints has seen one such template letter from a serps reclaims firm recently and its a disgrace. Its full of BS reasons. Another firm has also been reported to their compliance network for breach of their own internal compliance rules that forbids the IFA and claims company working together like that (no regulatory rules prevent if but their network rules do).

There are not that many companies that do this sort of thing nowadays and I suggest you do not name any companies, as i havent either as the comments are best to remain generic. There is a claims company that monitors this board and reports threads that name them and get the board to remove the posts.

they get money from other side .. is this true

No. That is a lie. Financial services redress is such that the complaints process is free of charge. If you decide to employ someone to stick a stamp on your envelope containing a one-size-fits-all template letter then you pay them. Not the firm. Either they will take a percentage of your redress (if any) or they will encourage you to transfer you pension giving you some reason why they think the new one is better (which it could well be) but take a commission from it (which you pay for in product charges). Thankfully, this will be banned from 2013.

Bottom line is that if you were under the age of 45 when you contracted out then forget it. If you want a review of the pension, then use a local IFA that is honest and not one that uses a fake reason to try and get you to contact them to earn a commission on a transfer.

also notice how they dont mention the free FSA brochure with the flowchart in it. A copy is here: http://webarchive.nationalarchives.gov.uk/20100210151716/moneymadeclear.fsa.gov.uk/pdfs/s2p_wrongly_advised_ink.pdf
the FOS bit confirming you have to pay the costs of a third party: http://www.financial-ombudsman.org.uk/faq/businesses/answers/handle_cases_a9.html
FSA outcome showing 1.5% mis-sale ratio: http://www.fsa.gov.uk/pages/Library/Communication/PR/2007/059.shtml