Pension mis-selling and scams are a hugely understated problem in the UK, and most industry commentators agree more needs to be done to stop people falling into the traps set by scammers and mis-sellers.

Dealing with a huge number of mis-sold pension claims on a daily basis has given the team at Get Claims Advice Ltd a unique insight into the pitfalls caused by the growing pension mis-selling scandal – potential pitfalls we’re happy to flag up and share with the world so more people can better avoid the scammers and mis-sellers looking to make a pretty penny from your pension pot.

If you’ve been squirrelling away for a happy retirement, you’d be wise to read up on these 3 big potential pitfalls that could torpedo your pension plans, and potentially leave you struggling in retirement.

But please note, if you feel you may have already fallen into one of these pension pitfalls, don’t despair, we’ll cover that at the end.

While our 3 pitfalls aren’t always a disaster for your pension, they often crop up in our work as a sign of a mis-sold pension. Remember, always seek independent financial advice before altering your pension plans.

Pension Pitfall One: Transferring your pension from a cold-call

This is exactly how most of the cases we deal with started out: a cold-call to the client offering them a “free pension review”, often leading to a risky and ultimately unsuitable pension situation – one that could (and often does) lose that client their retirement fund!

Over the past 10 years, there have been countless cold-calls made from call centres and marketing companies offering free pension reviews – a chance for the client to get on-top of those frozen and/or “under-performing” pensions, and supposedly put them to better use.

But often, these marketing companies are paid by pension and investment companies to funnel people towards their pension schemes and investments, which may not be run well, or could even be outright scams.

The people and companies that make these calls are often paid big commissions if they get you to transfer – more than enough incentive for less than scrupulous salesman to direct people towards a precarious pension plan.

Pension Pitfall Two: Transferring into a SIPP without the right knowledge and experience

Self-Invested Personal Pensions (SIPPs) can be a fantastic vehicle for investment, but generally when people know what they’re doing with them.

After-all, this is a SELF-invested personal pension, where YOU choose the investments. If you don’t have much experience and knowledge about investing, how would you know where to even start?

Remember those cold-calls we discussed in Pitfall One? Well, a firm favourite destination for cold-called pension transfers is a SIPP, usually so the money can be invested into high-risk schemes such as overseas property, forestry schemes and storage pods.

It’s these types of claims our specialist claims handlers spend most of their time fighting for on behalf of our clients, with our team alone having claimed back £millions from these high-risk and often thoroughly unsuitable situations.

Pension Pitfall Three: Not going through a regulated financial adviser

This is another biggie. There are plenty of marketing companies out there that can talk the talk, but when it comes down to it, aren’t regulated by the Financial Conduct Authority – the financial services watchdog. They may be unqualified, taking undisclosed commission and may leave you high and dry.

If you’re talking to an individual or a company about your pension, it’s a good idea to search for them on the FCA register – a database of all those authorised to give financial advice and perform other regulated tasks, including details about their permissions and any actions taken against them by the regulator.

Dealing with an FCA regulated adviser means that the advice you get from them is covered, so if they give you negligent advice and your pension goes wrong, you may be able to make a claim later.

Already in a spot of bother?

You wouldn’t be alone, the pension mis-selling scandal is a growing problem, but one seldom talked about due to its complicated nature.

If you’ve lost money from your pension, or recognise too many of these warning signs as a part of your own pension transfer story, you may want to get onto it sooner rather than later.

The team at Get Claims Advice Ltd are usually on standby for a free initial assessment to help you find out if you’ve been mis-sold, and if you have, you’re free to pursue the claim yourself through the Ombudsman or FSCS, or use Get Claims Advice to fight your corner.

Don’t take pension mis-selling lying down – get help if you need it.

Tom Iveson is the Content Manager for Get Claims Advice where he covers topics related to SIPPs and mis-sold pensions.

Categories: Personal Finance

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