Generally,how successful is the Financial Ombudsman?

smalllove2

A company sold me an annuity without explaining what it was exactly, in fact I've only recently found out! My pension "pot" is very small, about £19000, but it seems when I die, so does the pension!

Dispite a heart attack and several minor strokes, they assume I will live until I'm 86 - which is another 23 years, which isn't going to happen. Although this is my money I can't touch or alter it in any way.

So in theory I will probably be giving the company about £10,000. Legalised theft? Obviously if I'd have been told all this I wouldn't have agreed to it.

I've sent my complaint to the F.O. which is very busy at the moment, so quite slow. In the meantime, has anyone had a similar experience? I'd be very grateful for any advice, although no doubt you've had many posts like this!

dunstonh

A company sold me an annuity without explaining what it was exactly, in fact I've only recently found out! My pension "pot" is very small, about £19000, but it seems when I die, so does the pension!

And what do you propose that they should have sold you instead when you consider that your only options were annuity or income drawdown? (the latter being a higher risk transaction and generally suited to those with larger amounts)

Obviously if I'd have been told all this I wouldn't have agreed to it.

Did you seek advice or did you commence the annuity with the same pension provider?

I've sent my complaint to the F.O. which is very busy at the moment, so quite slow.

You cannot go to the FOS directly. They will forward your complaint on to the advising firm or if no advice was sought then the pension provider.

although no doubt you've had many posts like this!

Not that I can recall.

I'd be very grateful for any advice

Your chances of success are virtually zero if you used the pension provider as they have no responsibility or even a licence to give you advice. If you used an adviser, then you are still likely to see a limited chance of success. Your post isnt very big and its not really suited to drawdown. Given your medical history, I would have expected them to recommend an ill health annuity which would take into account your life expectancy and pay a larger amount. It certainly shouldnt take 23 years if that was the case.

Can you clarify if you either used an adviser, used the pension provider or did the transaction yourself?

insured

I do not know whether this will help or not, but I recently took a case to the Ombudsman against an insurance company.
It took about 9 months to get it heard (backlog) but once it got to the top of the pile it took only a couple of weeks. I won my case.
However, my claim was different to yours so could not comment on whether or not the annuity was missold. Still worth a try.
Best of luck.

MarkyMarkD

It's not "still worth a try", insured, if the annuity wasn't mis-sold. The main reason the FOS has such a slow turnaround time is because of the huge proportion of entirely spurious claims they have to waste time dealing with.

It's a fact of life that pension funds have to be used to buy annuities, unless they are sufficiently large to justify setting up an income drawdown arrangement.

The only possibility of mis-selling is if the adviser failed to investigate impaired health annuities which sound eminently appropriate in the circumstances, not for selling an annuity per se.

dunstonh

The "have a go" complaints are causing the system big problems. It was never designed for "have a go" complaints and the funding for it was never designed for "have a go" complaints. The FOS recently lost a court case where a judge ruled that the IFA shouldnt have to pay the FOS fees when the complaint was not upheld. This has raised loads of issues and discussion on funding for the future. Some proposals have suggested the consumer pays a fee unless case is upheld. From memory the overall uphold rate for everything is around 33%. So, 2/3rds of complaints are rejected. Companies never really had a problem with the funding of the FOS until it started to be abused as it has been. Now a judge has ruled, that is likely to change. Although the FOS have said they are going to appeal. Even the chief ombudsman has admitted there are fraudulent and trivial complaints that should never be made.

The OP needs to confirm how the purchase of annuity took place. Until we know that, there is no way really to say what the chances are.

smalllove2

Thank you for your replies. It's wrong to assume I knew what I was doing, a man calls at the door and tells me he can improve my company pension from WH Smiths my ex-employer.
I just thought I was buying a better pension and better returns, Yes I was naive but I thought a company like Royal life was to be trusted.

I know nothing about drawdowns as mentioned, as I said, until a few months ago I didn't know what an annuity was. Thank you.

dunstonh

It's wrong to assume I knew what I was doing, a man calls at the door and tells me he can improve my company pension from WH Smiths my ex-employer.
I just thought I was buying a better pension and better returns, Yes I was naive but I thought a company like Royal life was to be trusted.

Unfortunately, none of that has anything to do with this particular transaction. The pension gets you to retirement. The annuity provides an income in retirement.

I know nothing about drawdowns as mentioned, as I said, until a few months ago I didn't know what an annuity was. Thank you.

Royal Life is owned by Resolution Life (Phoenix). They have no advisers and do not give financial advice. Therefore the complaint is likely to fail. They would have supplied the information telling you the options that they have available and also mentioned the open market option and they would tell you to seek independent financial advice. You appear not to have done this and made a decision to go DIY.

You cannot complain about advice if you didn't seek advice. However, if it is only recently done, it may be possible to unwind the annuity purchase.

It is also possible that the transaction was still the right one. Even if we go right back in time to when it was with WH Smith and say you left it there, you wouldn't be getting a lump sum from them either. You would get the usual tax free cash on some of it and an income on the rest in an identical manner.

To put it in another context, you have tried fixing your own boiler, made a mistake and are now trying to blame the manufacturer.

EdInvestor

smalllove2 wrote: »

Thank you for your replies. It's wrong to assume I knew what I was doing, a man calls at the door and tells me he can improve my company pension from WH Smiths my ex-employer.

Are you saying that you were persuaded to move a pension from WH Smiths to an insurance company? Was this a final salary pension? When did this happen?

I just thought I was buying a better pension and better returns.I know nothing about drawdowns as mentioned, as I said, until a few months ago I didn't know what an annuity was. Thank you.

Potentially this sounds like a case of "pension unlocking" by an unauthorised company - authorised advisors are not allowed to "cold call". It would be helpful if you could give more details.