Was I miss-sold an AVC?

thegringo

I worked in Local Government from1974 to 1987. I then went to college for four years to gain a teaching qualification. When I qualified and began teaching I was able to transfer my pension from local government to the Teachers Pension Scheme. I contacted Prudential about buying back the four years pension I’d lost out on but was told I couldn’t do this and was advised to buy AVCs instead. This I did for about eleven years. However I’ve recently heard that I could have bought the additional four years pension and was mis-informed by Prudential. Is this correct? The considerable payments made to Prudential would have been better spent on additional pension. I would welcome any advice regarding this - was I miss-sold the AVCs and would I be able to get compensation?

greenglide

You would have bought extra years from the pension scheme though, not prudential wouldnt you?

Can you prove what was said? AVCs do have their place, but additional years are often better.

hyubh

thegringo wrote: »

I contacted Prudential about buying back the four years pension I’d lost out on but was told I couldn’t do this and was advised to buy AVCs instead.

The Pru have never administered the TPS - asking them was akin to asking your bank. That said, speaking in terms of 'buying back' pension membership that was 'lost' sounds a bit odd to me - TPS membership is for teachers, and if you're training to be a teacher you're not a teacher - so I'm not entirely surprised you were told you couldn't do that.

dunstonh

I contacted Prudential about buying back the four years pension I’d lost out on but was told I couldn’t do this and was advised to buy AVCs instead.

Pru only administered the in-house AVC. They didnt offer any other option.

However I’ve recently heard that I could have bought the additional four years pension and was mis-informed by Prudential. Is this correct?

No. You had to go to the TPS to buy added years. Not the Pru.

was I miss-sold the AVCs and would I be able to get compensation?

If you bought direct from Pru and didnt get advice then there is no one to complain to. If you sought advice from an adviser, they would have gone through the options (which back then would have been AVC, FSAVC and added years). Each has pros and cons. However, it doesnt sound like you used an adviser. So, you dont benefit from the consumer protection that brings.

One of the reasons AVCs or FSAVCs were commonly used was that they would take on lower monthly premiums. Whilst added years could give more on a £1 for £1 basis (partly known through hindsight rather than at the time), the cost of buying added years was typically higher on a monthly basis. The AVC existed for those that didnt want to pay as much as that per month.

Greeniron

It may be possible to make a claim but it wouldn't be mis-selling as such, as Prudential weren't advising you and in-house AVCs are outside of the remit of the Financial Ombudsman Service. However if you arranged an in-house AVC with Prudential, they had to tell you about the existence/alternative of buying added years. If you search decisions on the Pensions Ombudsman's website, there are several examples of this sort of case. If you completed an application form referring to added years, or if Prudential can show you were informed about the possibility of buying these in some other way, the complaints are generally not upheld.

I'd suggest approaching the Pensions Advisory Service in the first instance to talk through your case in more detail.

thegringo

Many thanks to you all for your response and advice. If I take this matter further I'll post any outcome.