Pension advice

Williamstrio

Hi all, I'm hoping someone can help with a little advice on my pension. I started work in 1991 and required a bank loan to buy my first car to get to work. Sounds a little daft but back then I borrowed £500 but was told I had to speak with an advisor before I could withdraw the money to which I agreed. On speaking with the advisor I was told that the loan could be authorised if I took out a pension. 

Needing a car I took a pension out for £24 a month and have never thought about it until I was speaking to a colleague who advised that I have been missold the pension on 2 accounts:
1, I was to be started in a work (NHS) scheme and should have been advised to buy extra years in that,
2, the loan could be authorised without taking the pension.
My questions are:
1, if I have been missold am I able to reclaim the money? or
2, am I better to increase my contribution to build mt pension?

I am currently in my 30th year in the NHS at 47 years old and another possible 20 years of pension to pay.
Any advice will be greatly appreciated. 
Thank you for taking the time to look at my post.

Dazed_and_C0nfused

Are you still paying the £24/month?

If not when did it stop?

How much is the £24/month pension currently valued at?

Williamstrio

Thanks for the quick reply,  I am still paying the £24 a month, my pension summary on 01st August 2021 was £19,769.92.

McKneff

I was told, I was told doesn't cut it. Do you have written and signed evidence.

If you proved it and got the money back  it would also be less all you tax and ni that you didn't pay and also less your employers contribution.
Leave it alone, add to it and you'll have a great nesting when you retire.
There always the chance that state pension won't exist so you'll be well set up

Williamstrio

There is no employer contribution, tax or ni as it is a separate pension to my works scheme?

McKneff

My apologies 

Even a separate one you would have got tax relief 
Which would be taken into account. 
Can you transfer into your nhs pension

dunstonh

1, I was to be started in a work (NHS) scheme and should have been advised to buy extra years in that,

£ for £, added years is better.  But the cost of buying added years was higher.   You often found that those with more money went with added years whilst those paying minimum amounts went with individual pensions

2, the loan could be authorised without taking the pension.

That would be a missale reason but its also one of the most difficult to get an upheld decision on.  Usually, because the person that sold the pension would have had nothing to do with the loan.  They would have to have made sure the pension was suitable for you.  Plus, there won't be a shred of evidence anywhere to support your allegation.

1, if I have been missold am I able to reclaim the money? or
2, am I better to increase my contribution to build mt pension?

1 - If what happened is what happened then yes to being missold but no to being able to reclaim the money.  That money in the pension is already yours and it would have grown.   So, you are financially better off by them doing this.
2  - Probably not as most 1990s products are obsolete bar a few gems.  A more modern option is probably better.

You have nearly 20k by them making you do this.  If they hadn't, you wouldn't have bought added years and you would have spent the pension contribution.   So, whilst there appears to be alleged wrongdoing, you have money because of it.

If you allege a missale and ask for your money back, you would get back less (in reality, they will say you are better off with what you have and not financially worse off)

Thanks for the quick reply,  I am still paying the £24 a month, my pension summary on 01st August 2021 was £19,769.92.

Of course, you wouldn't have been paying £24 back in 1991.   £24 is what you started paying when basic rate relief went to 20% in 2007/8.   In 1991, you would have paid £22.50.

Williamstrio

Would it be my NHS team I discuss this with or Scottish Widows 

Williamstrio

Thank you  Dunston,  totally agree that I'm better off just made me think when my colleague and I were talking whether it was worth using the contributions or not, as I said earlier it was what I could afford when starting my career and I have never given it a second thought until now. Maybe worth a call to both nhs pensions and Scottish widows to see how and which to invest in.

Thank you all for the quick replies!

Albermarle

McKneff said:

I was told, I was told doesn't cut it. Do you have written and signed evidence.

If you proved it and got the money back  it would also be less all you tax and ni that you didn't pay and also less your employers contribution.
Leave it alone, add to it and you'll have a great nesting when you retire.
There always the chance that state pension won't exist so you'll be well set up

It is very unlikely the state pension will not exist in future, as any political party that abolished it would get slaughtered at the next election, and probably would never have power again.

In any case £20K is a pretty small amount in pension terms, even if it grew to £50K .

For example to buy the equivalent of the current state pension at age 66 would cost about a third of a Million Pounds. 

The OP is building up a NHS pension, which will also presumably dwarf this small pot by the time they retire.

LHW99

As a separate DC pension, it might let you retire a couple of years before the NHS retirement age, and defer the NHS pension, so that it isn't reduced.