And no, it’s nothing to do with PPI…
Quite soon, you should stop receiving unwanted phonecalls about PPI – hurrah!
The practice of cold-calling about PPI is already banned, and with new GDPR laws, as well as a deadline for this sort of claim looming in 2019, it should be enough to kill-off those calls for good.
But there is a newer, much bigger scandal that is causing HUGE compensation payouts in the tens-of-thousands of pounds.
It involves cold-calls offering a free pension review…
If you’ve moved your pension in the last 10 years, then you need to bear in mind you could be entitled to make a claim, whether you know it or not.
Tens of thousands of cold-calls, leaflets and face-to-face chats with advisers and marketing companies have led people to transfer their pensions into unsuitable positions, or to lose out on special benefits from their old pension provider.
In many cases, this has been driven by the greed of marketing companies, who could earn a small fortune from transferring old pensions, even more so if they transferred those pensions into somewhere risky.
Pension Transfers and Risk
Nearly all pensions are invested in something, and investments can either increase or decrease in value, which means all pensions are exposed to some risk.
But how much risk differs from pension to pension.
Some people have been advised to transfer their pension from safer places (like Final Salary pensions, provided by the government or generous employers) and into SIPPs: Self Invested Personal Pensions.
These SIPPs can be used to then invest in nice, safe and FCA regulated investments.
But remember those marketing companies we spoke about? Well, they can earn a lot more by persuading people to invest in high-risk investments.
Stuff like Overseas Property, Storage Pods, Green Energy initiatives and more, have been marketed to ordinary people as wonder investments that will earn them a fortune for retirement.
But in fact, these investments are high-risk ventures, unregulated by the FCA, and if they go wrong they could change a pension value to £zero, sometimes without that pension holder even being informed there was a problem.
Mis-sold Pension Claims
Much like the PPI scandal, most people who have a mis-sold pension don’t realise they have a claim, unless something does go wrong and they get a letter through the door to tell them their pension has decreased in value.
But there are some signs that could indicate that you may be able to make a claim…
- You transferred your pension after a cold-call or Free Pension Review
- You transferred to a SIPP, SSAS or QROPs but don’t know why?
- You Invested in anything overseas
- You invested in non-FCA regulated funds.
Any of these could be an indication that you have been mis-sold, especially if you’re not a High Net-worth Individual (earn £100k+ per year), or a Sophisticated Investor, for which these types of pension arrangements would have been suitable for.
The FSCS paid out over £100m last year (2017/2018) for mis-sold SIPP claims, and that figure seems to raise every year, so if you’ve changed your pension arrangements in the last few years, it could be worth looking into what it was invested, you may be sat on a claim!
Tom Iveson writes about creating a greater awareness about pension mis-selling for Get Claims Advice