AVC: Bank offers compensation

DerekMc

I recently asked my bank to investigate the selling of an AVC pension to me 20 years ago as I had recently discovered that my public sector employer had offered a similar scheme but with lower charges. I argued that the advisor appointed by my bank should have made me aware of other options to consider. The bank have offered compensation indicating that the advice given 'may not have been suitable for my circumstances'. They say they have compared the AVC with my employer scheme, and calculated compensation as per FSA guidelines and offered to increase the plan value by several thousand pounds. Assuming the calculation is correct (and I have no way of knowing) then this is welcome. However I am nearly 20 years off pension age and the question is, what now? I am still left with an AVC costing more than my employer's equivalent scheme. I am wondering what my options are. Could I/should I consider switching and if so what are the potential costs of doing that? I would appreciate informed opinions. Thanks.

dunstonh

I am still left with an AVC costing more than my employer's equivalent scheme.

Not exactly. The FSAVC sold by the bank is no longer an FSAVC but a personal pension. Rule changes in 2006 may actually make the ex FSAVC more favourable than the in house AVC option. e.g. many in house AVCs still dont allow tax free cash from them and have to be taken with the main scheme. PPPs can be taken between 55-75 and can have 25% TFC.

As for charges, modern personal pensions can be very cheap. So, transferring it may be an option. Or maybe your employer's scheme may accept it as a transfer in.