Pension mis selling

PENSION_MUG

Once again you make it sound so simple but when you are given advice you put your trust in the people that give you that information when they set out to give you only some of the information and leave out the facts that pensions are guaranteed and there is no risk of losing them, then tell you your best Interests are served by taking out a personal pension that you can keep contributing to therefore building up that pension when that pension is already there for makes his decision to advise me to move absolutely stink I hope if anythink in this day and age of social media and the ease at which you can find out information that this article helps someone out I will at least of helped good luck to anyone who reads this 

Brynsam

PENSION_MUG said:

Once again you make it sound so simple but when you are given advice you put your trust in the people that give you that information when they set out to give you only some of the information and leave out the facts that pensions are guaranteed and there is no risk of losing them, 

At the time you transferred out, pensions were anything but 'guaranteed with no risk of losing them'. If an employer went bust, there was no requirement to have any particular level of funding in their (defined benefit) pension scheme, so pension scheme members could be left with absolutely nothing. Only when the Pension Protection Fund was introduced in 2005 did that change. 

The adviser was required to show you pension projections which were based on mandatory assumptions (he didn't make them up) and it sounds as if you, like most people, thought it made a lot of sense to transfer out. Based on those wildly optimistic assumptions, it almost certainly did look that way for people who had left the employer's service.

Dox

PENSION_MUG said:

 the original pension was £6000 a year but the transfer value was only £2400 into a personal pension, 

OP - how long were you a member of the company scheme (roughly) and what was your leaving salary (again, roughly - you aren't likely to remember with any precision so long after the event).

PENSION_MUG

The original pension was guaranteed at 6000 your right my salary at the time was probably about 8-9000 a year, I was only in the scheme for 12years but this combined with the transfer of only 2400 made little sense to me then as I was not a financial advisor I've said many a time this was a credited  financial advisor withholding a lot of information and giving me misinformation and telling me this was my best option, he failed clearly to let me know he would be managing the fund once it was transfered and failed to tell me he was remaining as my financial advisor, this once again is a falling on my part as I thought Norwich Union had taken over the responsibility of the policy which is one of the main things the ombudsman is saying that I had a responsibility to have some knowledge of financial affairs to realise there was a problem, if I had sought help from another financial advisor what's to say they would of given me the right advice! 

Dox

PENSION_MUG said:

The original pension was guaranteed at 6000 your right my salary at the time was probably about 8-9000 a year, I was only in the scheme for 12years but this combined with the transfer of only 2400 made little sense to me then as I was not a financial advisor I've said many a time this was a credited  financial advisor withholding a lot of information and giving me misinformation and telling me this was my best option, he failed clearly to let me know he would be managing the fund once it was transfered and failed to tell me he was remaining as my financial advisor, this once again is a falling on my part as I thought Norwich Union had taken over the responsibility of the policy which is one of the main things the ombudsman is saying that I had a responsibility to have some knowledge of financial affairs to realise there was a problem, if I had sought help from another financial advisor what's to say they would of given me the right advice! 

Making some big assumptions (always dangerous, but I doubt full info is available?), I wonder if your pension really was guaranteed at £6,000 per annum as you believe? A typical final salary scheme of that period would mean you built up benefits at the rate of 1/60 of your 'pensionable salary' (which may have been less than your actual salary, but again I don't have the detail), which would mean at the time you left you had built up benefits of (say) £8,500 [salary] x 12 [years] x 1/60 = £1700, payable from your scheme's Normal Retirement Age (NRA). 

Between the time you left and the time your pension came into payment, part of the pension would have been increased, broadly speaking at the lower of 5% or price inflation. Most of the pension you earned before 1985 would have been 'frozen', so would not have increased in value. Although you are likely to have seen words to the effect that your pension is 'guaranteed to be payable for life', it would have been impossible to predict in 1989 what the amount of that pension would be, and you will at best have seen a projection of what it could be. Typically such projections were based on the assumption that inflation would be 5%, since at the time there seemed little chance it would be lower than that.

Inflation rates were very high in the late 1980s, and the cost of buying an annuity (aka a pension) was much 'cheaper' than it is now. The projections the adviser was required to show you were based on these and would have looked extremely attractive. These factors, coupled with the fact that a large chunk of your pension was 'frozen', would have made a transfer look quite a sensible option, depending on the transfer value - and give your young age, the transfer value you say you took doesn't look unreasonable. Where it was invested was a crucial factor in how much you could expect to have at the time you came to draw your benefits - if it went into a nice safe low risk/low return fund, the outcome was never going to shoot the lights out.

I appreciate there's a shedload of alien information in this post for you to absorb, but even if you hadn't been time barred, I'm not convinced you would have a complaint upheld, for the reasons I've explained. That won't make you feel a whole lot better, but I hope it might make you feel slightly less upset. 

PENSION_MUG

No the pension was guaranteed at 6000 that is what the ombudsman keeps quoting that I should have reused this as it said guaranteed, when I was in discussion with the adjudicator this was one of my arguments with the transfer value only being a small amount the fund would of needed to be exceptionally good to pay 6000 without any more contributions! 

eskbanker

If your complaint went right through the process as far as an ombudsman decision then the rationale for that decision will be published online at https://www.financial-ombudsman.org.uk/data-insight/ombudsman-decisions - what's the Decision Reference Number?

Dox

PENSION_MUG said:

No the pension was guaranteed at 6000 that is what the ombudsman keeps quoting that I should have reused this as it said guaranteed, when I was in discussion with the adjudicator this was one of my arguments with the transfer value only being a small amount the fund would of needed to be exceptionally good to pay 6000 without any more contributions! 

Makes me wonder if they understood the position. Not sure what you mean by 'reused' ?

PENSION_MUG

Realised sorry 

PENSION_MUG

I'm not sure whether the decision is online yet but will check, as this is still ongoing