17th of April 2023
Retirement should be a time of relaxation and enjoying the fruits of your labor. Unfortunately, for some people, retirement can be a time of stress and worry due to mis-sold pensions. Mis-sold pensions are a significant problem affecting millions of people, causing them to lose their hard-earned savings and leaving them financially vulnerable in their golden years.
A mis-sold pension is a type of financial product that was sold to an individual without proper explanation of the risks involved, the fees, or the options available to them. Often, the salesperson or advisor may have misled the individual into believing that the investment was low-risk or guaranteed, without disclosing the potential downsides which led to the client losing money or benefits.
One of the most common types of mis-sold pensions is known as a 'defined benefit transfer,' where individuals were advised to move their retirement savings from a defined benefit scheme into a personal pension. Defined benefit schemes provide a guaranteed income for life, whereas personal pensions are based on investment performance and can go down as well as up. The transfer may have been unsuitable for the individual, and they may have lost valuable benefits, such as a guaranteed income, index-linked pensions, and death benefits.
Another example of mis-selling is the sale of self-invested personal pensions (SIPPs) that may have contained high-risk or unsuitable investments such as overseas property, unregulated collective investment schemes, and non-standard assets such as forestry and storage pods. These investments may have been misrepresented as low-risk, high-return or may have been entirely unsuitable for the individual.
Mis-sold pensions are a significant problem for several reasons. Firstly, the individual may lose their hard-earned savings, leaving them financially vulnerable in retirement. Secondly, mis-selling can lead to mistrust of the financial industry, which can have a negative impact on the economy as a whole. Thirdly, the individual may be forced to work longer, reducing their quality of life in retirement.
In some cases, the mis-selling of pensions has been so widespread that it has led to the collapse of pension providers, such as Equitable Life. The consequences of mis-selling can be far-reaching and devastating for individuals and society as a whole.
It can be challenging to identify whether you have been a victim of mis-selling. However, there are several signs to look out for, including:
If you believe you have been mis-sold a pension, you may be able to make a claim for compensation. You can contact us today, and we can conduct a free non-obligatory assessment.
Mis-sold pensions are a significant problem affecting millions of people. If you believe you have been a victim of mis-selling, it is essential to seek independent advice and explore your options for making a claim. By holding those responsible for mis-selling pensions accountable, we can help to protect individuals and the economy as a whole from the negative consequences of this type of financial fraud and get your hard earned money back to you.