Is it too late to pursue a mis-sold pension?

Ivesyxyz

Hi, since my mother has gone in to a care home I've had my post from her previous address re-directed to mine.  One letter I received was from Royal London, with a statement of how my pension was doing.  I did remember taking out a contracted out pension in 1991 but after a month or so I cancelled the direct debit thinking that would cancel the pension.  It appears though the contibutions due for the second state pension where STILL being paid to the Personal Pension even though I was in a Final Salary pension at work.  It seems this continued right up until around 2000/01. Not sure to be honest if it's worth pursuing or have I missed the boat? or, if I haven't will it be worth the hassle? That said, I don't mind getting this looked in to if it will help come retirement time! Any help or advice greatly appreciated smile:

molerat

So why do you think you were mis-sold ?

You had a final salary pension at work that was likely contracted out so no additional state pension would be due.

The contracted out NI payments were going to another pension so giving you another pension that you did not know you had.

I can't see what your complaint is.

msallen

Its unclear exactly what you are saying, but there's certainly nothing to suggest mis-selling.

If you cancelled the DD where were the contributions to the RL pension coming from?
Did contributions to your FS pension continue correctly?
What has happened to all the statements from RL between 1991 and now?

xylophone

 One letter I received was from Royal London, with a statement of how my pension was doing.  I did remember taking out a contracted out pension in 1991 but after a month or so I cancelled the direct debit thinking that would cancel the pension.  It appears though the contibutions due for the second state pension where STILL being paid to the Personal Pension even though I was in a Final Salary pension at work.  It seems this continued right up until around 2000/01.

An old information piece from before 2012.

https://www.pensiontracingservice.com/contracting-out#:~:text=You can also contract out,personal pension once a year.&text=This will be a rebate,tax relief on your rebate.

The date cited in your letter for the ending of the payment of NI rebate  to RL appears to coincide with the change from SERPS to S2P?

https://techzone.abrdn.com/public/pensions/Tech-guide-contracting-out#:~:text=On 6 April 2012, contracting,contracted out monies as transfers).

You seem to have "contracted out" into an APP ( a personal pension in your case) at some  point in 1991.

Are you saying that at a later point in 1991 you joined a DB Scheme  and that was the reason that you cancelled your contributions to your personal pension?

But you were both paying lower NI in your DB Scheme and receiving a rebate into the RL Scheme during the same period?

It seems rather odd.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf


Have you obtained a State Pension Forecast?

https://www.gov.uk/check-state-pension

Have you contacted Royal London to establish whether you are due a pension from this policy?

It might be worth a call to HMRC to establish your exact situation.

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/pensions-helpline-contracted-out

Albermarle

Most pension investments have done very well over that period, so in fact you might be 'quids in' 

Marcon

molerat said:

So why do you think you were mis-sold ?

You had a final salary pension at work that was likely contracted out so no additional state pension would be due.

The contracted out NI payments were going to another pension so giving you another pension that you did not know you had.

I can't see what your complaint is.

If the final salary pension was contracted out, OP would have paid reduced NI, so there would have been no contracted out NI rebates to be paid to a personal pension - you couldn't be contracted out twice in respect of the same employment.

If the final salary scheme was contracted in, then OP would have paid full rate NI and could have had a personal pension purely for contracting out purposes, and decided to make payments by direct debit to add to the personal pension (which might actually have been a Free Standing AVC at the time, just to throw a bit more jargon into the mix!).

Cancelling the direct debit would not have cancelled any rebates being paid in respect of NI, because those happen directly between the pension provider and the government department responsible for handling NI.

In short, not clear there are any grounds for complaint, but the question doesn't give enough info to be sure what was happening, let alone whether any 'mis-selling' was involved.

dunstonh

 I did remember taking out a contracted out pension in 1991 but after a month or so I cancelled the direct debit thinking that would cancel the pension.  It appears though the contibutions due for the second state pension where STILL being paid to the Personal Pension even though I was in a Final Salary pension at work.

Lots of confusion here.

If you were in a contracted out defined benefit scheme, you could not contract out of SERPS.   The plan could be set up and ready to accept rebates but the rebates would never arrive for as long as you were a member of the DB scheme.

In 1991, you could not join a personal pension scheme if you were a member of an occupational pension.

So, somewhere you story does not quite add up.   You may need to check your dates.   it maybe that you were not in the DB scheme at the point of joining the personal pension.   it maybe that the db scheme was not contracted out (extremely rare).  Or you left the DB scheme and upon leaving, it turned the rebates on.

 Not sure to be honest if it's worth pursuing or have I missed the boat?

You haven't stated any wrongdoing.   And there has been no boat to miss.

Marcon

dunstonh said:

In 1991, you could not join a personal pension scheme if you were a member of an occupational pension.

This is testing my memory, but I seem to recall you could have an Appropriate Personal Pension (to accept NI rebates only) if you were in an occupational scheme which was not contracted out...? You certainly couldn't contribute otherwise, hence my comment above speculating that OP's DD actually related to a FSAVC.

Bimbly

Sounds to me like to may have a bonus - a pension which you did not know you have. This means you will have more money for your retirement - congratulations!

I would get in touch with Royal London and - first and foremost - make sure they have your correct contact details. Then ask for some more details about the scheme - a scheme booklet, for example - and, while you're at it, ask if they have details of the contributions you have made.

dunstonh

This is testing my memory, but I seem to recall you could have an Appropriate Personal Pension (to accept NI rebates only) if you were in an occupational scheme which was not contracted out...?

Correct.   You could have an APPP but not a PPP.  It would have to be a FSAVC for the personal contributions.

If an APPP was set up, it would never have received any rebates if the DB scheme was contracted out.  DB contracting out trumped APPP contracting out.

Albermarle

dunstonh said:

This is testing my memory, but I seem to recall you could have an Appropriate Personal Pension (to accept NI rebates only) if you were in an occupational scheme which was not contracted out...?

Correct.   You could have an APPP but not a PPP.  It would have to be a FSAVC for the personal contributions.

If an APPP was set up, it would never have received any rebates if the DB scheme was contracted out.  DB contracting out trumped APPP contracting out.

Not sure if it is relevant but my own case is as follows;
I was in a defined benefit scheme from 1985. It was contracted IN to SERPS.
We were able to contract out from 1987/1998, and NI contributions were sent to a personal pension plan set up by the company with Standard Life. I never remember it being called an Appropiate PPP, and the old paperwork refers to a Group PPP. ( Many years later, after NI contributions had stopped, I later I had it changed to a PP, so I could make some additional contributions)