Mis sold Pension redress calculations

mjatom

Hi. I believe I have been mis-advised to switch a pension in 2007. I am now 65 and having recently taken an annuity out, I then found out about GAR's in my previous policy. The financial advisor involved is no longer trading and never told me about the GAR's at the time. Can anyone give me some idea how the FSCS might calculate any compensation where Guaranteed Annuity Rates (GAR) were lost. I reckon the difference between the GAR pension I would have got and what I now receive is about £2000 per annum. I believe any redress is calculated using life span mortality info & discount rates that are reviewed every year in a report issued annually by Price Water House for the FOS and is available on the FOS website, unfortunately I don't understand it. Any help would be appreciated, many thanks.

dunstonh

Can anyone give me some idea how the FSCS might calculate any compensation where Guaranteed Annuity Rates (GAR) were lost.

Typically, they attempt to find out what the value of the old plan would have been and apply the GAR to that. They then look at the market rates you would get on the current pension and see if there is a difference.

Having GARs is not an automatic mis-sale. I have recommended someone with GARs transfer before (as well as tell others not to transfer). In the case I did, the bonus rate had been zero for the last 8 years and the GAR was lower than market rates.

mjatom

Thanks for your comment. Iwas simply asking how redress is calculated should I make a succesful claim. Any ideas?

OldBeanz

As dunstonh says
"Typically, they attempt to find out what the value of the old plan would have been and apply the GAR to that. They then look at the market rates you would get on the current pension and see if there is a difference."

mjatom

Thanks, I understand that now. Once they establish the difference I beleive they relate this to your life expectancy and discount the sum to arrive at a one off compensation, price water house set annual peramitures for this. I just wondered how this works.