Miss sold pension?

JMW77

My partner was sold 3 policies by the same person when he was about 18 -22 ,i cant quite remember what he was paying into each policy but it was way more than he could afford he had no savings ,had no home of his home had no family as yet and was probably in a bit of debt infact he was always terrible with money.( Had CCJ's ) When we first met he used to say my pension will be worth millions.
He didn't pay long into these policies as it was way too much money and he stoped.Now we alway get a statement saying there's a couple of thousand in each at the most.

This was in the 80's he clearly had no real advice as one policy would of been fine with a realistic monthly amount.

He stopped paying in so i guess he didn't lose any money but it really annoys me he was taken in by a salesman who just wanted the commisision.



Just wondered what people think

[Deleted User]

Seems like he did well to make an early start on pension planning, though perhaps unfortunate he stopped. Multiple plans are the norm, especially if the transfer costs were disproportionately high.

Hopefully he's made further provision since.

Thrugelmir

30 years later it's difficult to comment. As no doubt elements of the story have been forgotten.

kinger101

You've not really given much information to go off. They might only be worth thousands now, but without knowing what was paid in, and whether any promises were made, it's a bit of a stretch to say these were mis-sold.

SonOf

He didn't pay long into these policies as it was way too much money and he stoped.Now we alway get a statement saying there's a couple of thousand in each at the most.

Pensions are only as good as what you pay in.

So, if he only paid in for a short period and stopped, then it will only be a small amount. It was never going to be millions unless he kept paying into them and increased the contributions to keep up with the cost of living.

For example, in the late 80s, a £30pm contribution was seen as a very good amount. Today, £100pm is the minimum of most providers and is considered very low.

Nothing you have said suggests missale but you havent given us much to go on.

JMW77

I think he was paying £150 in total a month but obviously that by the time the amounts increased each year he was told it would be worth millions by the time he retired.

Im just angry people are allowed to sell like this he probably only paid in for 18months because he couldn't afford to live.

i don't think i would be happy if a financial advisor sold my daughter a pension at £100 a month with yearly increases of 10% and then told her next month we will start another one for the same amount and i could come back and set up another one so you could have 3 policies.

That would be £600 in ten years.
You will have a great pension but although your on minimum wage this is good advice.

I don't agree i think its shocking advice

AnotherJoe

JMW77 wrote: »

I think he was paying £150 in total a month but obviously that by the time the amounts increased each year he was told it would be worth millions by the time he retired.
It probably would have been (aside government changing the regulations). You cant complain its not millions now if he only put a few hundred in.


I'm just angry people are allowed to sell like this he probably only paid in for 18months because he couldn't afford to live.

This was 30 years ago. Can you really get so angry about something that happened then that has no effect on him today except hes got a couple grand ticked away in several !!! Talking of which if its any consolation some pensions going back that far with minimal input at the start and nothing for 30 years woudl be literally worthless today because of high charges so comparatively speaking they dont seem too bad.


i don't think i would be happy if a financial advisor sold my daughter a pension at £100 a month with yearly increases of 10% and then told her next month we will start another one for the same amount and i could come back and set up another one so you could have 3 policies.
The products available now weren't available then and what was available then, wouldnt be what anyone would sell now, so thats all moot. For all we know they were the best possible product available at the time.


That would be £600 in ten years.
You will have a great pension but although your on minimum wage this is good advice.

I don't agree i think its shocking advice

The advice to take out a pension whilst young was, 30 years ago, good advice and is still generally good advice, indeed the governments made it the default, though not at these amounts obviously

Its not the advisors fault that your husband was a different person 30 years ago and couldn't do simple maths such as working out what he could afford. Perhaps get annoyed with your husband for telling you he'd be worth millions when you met him. Is that what this is about?

JMW77

No actually i told him he'd been taken for a ride and they were frozen over 27 years ago it was completely ridiculous unless you were in a highly paid job but he was living hand to mouth. He could of been talked into anything . The FA could of sold him anything i thought advisors were supposed to give you advice .

Thrugelmir

JMW77 wrote: »

i don't think i would be happy if a financial advisor sold my daughter a pension at £100 a month with yearly increases of 10%

Inflation was much far in the earlier 80's. Comparing era's is somewhat pointless. Hindsight isn't a valid reason to complain.

OldMusicGuy

There were a lot of people becoming FAs in the 80s and not much regulation. I knew a couple of people who did this and they largely sold to friends. So your partner's situation is not uncommon.

However, it might have been a very sensible thing to do, especially if he was/is terrible with money. Unless it was something really dodgy, the money will have been growing (these things are not "frozen"). My wife did this about 25 years ago and forgot about it. We recently found the old pension. She had invested £3,400 and last year when we found it, it was worth over £12,700 which is a pretty reasonable return after all costs.

So what do I think? Your partner was pretty sensible unless the policies are really dodgy, which as you haven't told us what they are, we can't say. It's a pity he didn't understand a bit more about what he had as he might have been able to make more use of them over the years.

SonOf

Regulation started in April 1988 and qualifications were not needed until 1994. An FA in that period was a sales rep. However, there are some issues with what you have said.

Prior to 2001, an individual under the age of 35 could only pay a maximum of 17.5% of the earnings into a pension. So, even if the FA/sales rep set the figure high, it couldn't have been taking most of his money. That is 17.5% gross. not net. He would have paid net. And tax relief back then was much higher than it is today. In 1990 it was 25%. So, even if he was paying the maximum, it would have only been around 13% of his net income.

it was normal to have multiple plans/segments with top ups. The move to an account based system is a more recent development. Charges were falling quickly back then and providers would have a new version out almost yearly. Making it cheaper in most cases to pay into the new version rather than top up the old version.

Im just angry people are allowed to sell like this he probably only paid in for 18months because he couldn't afford to live.

What did he tell the FA/rep was his budget? That is the figure that they would use.

i don't think i would be happy if a financial advisor sold my daughter a pension at £100 a month with yearly increases of 10% and then told her next month we will start another one for the same amount and i could come back and set up another one so you could have 3 policies.

£100pm is the minimum contribution for many pension providers today. £100pm is a small contribution in the scheme of things. a nd contributions can be increased, decreased, stopped and started. Some people have an initial high annual step up when they are behind with their planning.

Ultimately, the person is asked how much they can afford or want to pay. Strange things may happen of course. I recall a client telling me that he kept seeing an FA in the past as he fancied the girl and just paid in so he could see her and try and chat her up. His contributions were set to try and impress her.