Mis-advised re: opting out of SERPS

moneymazin

I've just been contacted by a company wanting to help me claim money owed to me because I MAY have been misinformed about opting out of SERPS when I took out a personal pension in 1998. I am now back in SERPS, however may be owed 6 years worths of money - the company obviously would like a nice fee for helping! Any idea where I can get advice/check if this company can be trusted?

dunstonh

Lets have a guess. Morgan Green by any chance? I suggest a forum search if I was you. It will save you money.

Did they tell you that they have a high success rate and that you could get back around 11-15k and that you were mis-sold despite them not knowing anything about your contract or circumstances?

The FSA did a review of contracting out and found that it had a failure rate of 1.5% of all applications. So, that means 98.5% of complaints would be rejected. The simple criteria is that if you were aged under 45 at the time of contracting out (40 for women) and were earning over approx £10k a year then contracting out is not bad advice.

however may be owed 6 years worths of money

Lets say you are one of the rare cases that was mis-sold and redress is paid. It doesnt come to you. It gets added to your pension. The claims company then come to you for the percentage which you have to pay out of your own money. Bet they didnt say that either.

Did they mention that the FSA issued a publication (which you can download from the moneymadeclear website) which tells you when you may or may not have been mis-sold? Again, bet they didnt because it would put you off using this company.

Did they tell you that you can make complaints using the FSA approved process yourself free of charge. So, if you do think you were mis-sold (i.e. outside of the pivotal age) then you can do it yourself for free. It is a legal requirement for claims companies to tell you this.

Did you also know that cold calling is banned under claims management company rules.

moneymazin

Thanks for info. Company was Park Lane Services International - who did cold call me. They wanted £540 for cost of claim and 15% of succesful claim. They also said the money would be in the form of a cheque and NOt added to the pension pot. How can I check out the FSA process?

dunstonh

Thats a new one on us. We have a list of claims companies that cold call on serpts contracting out and that one isnt on there.

They wanted £540 for cost of claim and 15% of succesful claim.

They want £540 up front because there is virtually no chance of success. That is where they want the money.

They also said the money would be in the form of a cheque and NOt added to the pension pot.

They cannot determine that. Each case would be looked at on merit. It also depends on whether an IFA or tied agent was involved as contracts cannot be cancelled most of the time and if a mis-sale is agreed a shortfall identified, the company will usually pay an amount into the pension to make up that shortfall.

How can I check out the FSA process?

Before you waste your time putting a complaint in, look at the stats. Were you under the age of 45 (male) or 40 (woman) when you took the pension out? If you were then you have little or no chance of it being classed as a mis-sale as you are the right age to be contracted out. If you intend to retire earlier than state retirement age, contracting out is best. If you want part of the second state pension/SERPS as a tax free lump sum then contracting out is best.

There is no nil risk option with contracting out either. Both options carry risk. Contract in and you risk the Govt reducing benefits (which they have done three times so far and a 4th is to come with the increase in state retirement ages. No clawbacks were taken from those contracted out). Contract out and you are subject to investment returns.

Here is a link to the FSA document on contracting out.
http://www.moneymadeclear.fsa.gov.uk/pdfs/contracting_out.pdf

and a link to the FSA document on whether you were wrongly advised or not.
http://www.moneymadeclear.fsa.gov.uk/pdfs/s2p_wrongly_advised.pdf

It says in the second one:

We have found no evidence of
widespread wrong advice to
contract out. However, we have
identified a potential problem with
a small and specific group of
people (around 1.5% of sales).
These are people who were:

advised to contract out between
1 July 1988 and 5 April 1997;
and

above a certain age – roughly
45 for men and 40 for women –
at the time they contracted out,
known as ‘pivotal age’ (see the

Jargon buster on page 12).
These people may have suffered a
loss as a result of wrong advice and

may be eligible for compensation.

---

So, this claims company is feeding you a line to get £540 out of you on a 1.5% chance of success.

If you were over 40/45 in 1999 and want to make a complaint you do so to the adviser or the advising firm. You dont need to pay a claims company £540 for 60 seconds of work by them sending their standard template letter to the advising firm on your behalf.

For reference, Park Lane only became incorporated last August so they are brand new to claims management. They have missed out on most of the endowment issues and that is probably why they are desperate to get you to pay money up front.

There is a general rule that claims companies dont want up front payment when there is a good chance of success. They only ask for up front payments when there is little chance of success.

shown73

Well done, H. Very interesting reply. There is a widespread feeling among shop floor workers, right or wrong, that we were somehow conned and bullied into opting out because it was in the company's interest. I went through this process twice, having changed jobs, and it has stuck in my mind. We knew little or nothing about pensions, and really, we were relying on the integrity of the companys to look after our best interests, since there was very little advice available anywhere. No internet in those days! No one trusted the company, of course, but we were left with little alternative, really, so it's interesting to read that the advice given was actually quite right! The Unions were concurring with management, I remember, but to be honest, they were not very trusted either! Now that I have begun to receive state pension, I see that there is a useful serps component in it, and I had wondered what it might have been had I resisted the pressure and stayed with serps. So, very interesting post, thanks...As it happens, I think that I was just hovering around the critical age, so swings and roundabouts, I suppose.

Leyspring

Hi,
I am one of the unfortunate ones who signed up with Morgan Green, however I notified them via e-mail with-in the 2 week "cooling off " period to cancel my claim. I paid £522 up front as they requested.
I am still chasing the company , with not much luck, can anyone help me with getting my money back.
What sounded originally a professional company , they seem to have turned into a bunch of cowboys.

EdInvestor

NEVER pay money up front to any claims company and be very cautious of any company that cold calls you..


"No win, no fee" is the rule.

Leyspring

Thanks for that , but do you know anyway , anyone who I contact for advice on how to put pressure on these people to release my money

EdInvestor

Try here

http://www.claimsregulation.gov.uk/consumers.aspx

treliac

Leyspring wrote: »

Thanks for that , but do you know anyway , anyone who I contact for advice on how to put pressure on these people to release my money

You could also try your local Trading Standards office (under your local authority).

fleurloriginale

Hi there - I read this thread with interest.

I have just be contacted by Day Cooper Adams about this very thing.

I opted out of SERPS in 1989. I was 18 years old and earning 5K at the time - it was my first full time post fter leaving college.

I was approached by my office manager with the paperwork and asked to sign it as it was going to be more beneficial to me in the long run. There was no financial advisor there nor was there a representative from the company that I opted out to.

I was told on the telephohne that because I had opted out in the beginning that I was going to have a 38% shortfall compared to someone who didnt opt out.

In that case I was able to claim £5000 for every 7 years that I opted out and that I would win 13-14K but they could comfortably say that I could double that!

I was told that I could invest the money to try to make up that shortfall.

If I agreed to this then they wanted £580 up front and when I won my compensation they would bill me for 12% of the total I received and be refunded my £580.

I have a feeling that I may have been mis-sold - but there was no actual selling but I think I need resources to research this myself.

Views anyone

Thanks