Were you mis-sold your pension?

A report from the Financial Conduct Authority in 2018 found that over 50% of people had been given poor advice when it came to their Final Salary or Defined Benefit Pension. That’s an alarming amount of people receiving bad financial advice! Because of this, it’s been possible for anyone who believes their pension was mis-sold to seek compensation. But how do you know if you fall into that category and could be entitled to compensation?

How to tell if your pension was mis-sold

To put it in simple terms, if you were persuaded to move your pension pot from secure investments into riskier or unregulated schemes, then your pension was probably mis-sold and you could be entitled to compensation.

Since freedom pensions were introduced, pension mis-selling has become more common. There are a few tell tale signs that suggest that your pension may have been mis-sold to you. Any financial advisor should have asked you a few key things, and if they didn’t, then the chances are that you could be eligible for compensation.

Your financial situation

In order to advice you properly, a financial advisor selling any pension product must know a few key things about you. Did they ask you about how you plan to fund your retirement and how much money you’d need to have coming in to meet any financial obligations? Were you asked about yours and your partner’s current employment, income and expenditure including any debts and financial responsibilities?

In order to receive the right advice tailored to your needs, it’s really important that an advisor knows your finances inside out. If they didn’t ask any of these questions, then you were probably mis-advised.

Your health

Your health and medical history are actually really important when it comes to thinking about planning for retirement. If you’ve already had health problems then you could have further problems in the future that require time off work and less money being paid into your pension pot.

It’s the little details like this that you might not have thought about at the time, but in hindsight, the lack of questions about your health could be a red flag.

The risks involved

Were all of the risks involved talked through with you? You should have been given all the information so that you could make an informed decision. If you weren’t then your pension could have been mis-sold.

Risks include having less income should your investments not be successful – there is always this risk if your money is invested in unregulated schemes.

As well as explaining any risks, you should also have been made aware of any benefits that you may lose by moving your money.

Retirement should be a time to spend time doing the things you love, without having to spend your days worrying about finances. If you do find that your pension isn’t as much as you expected, make sure you’re claiming everything else that you’re entitled to. For example, if you take care of your grandchildren, then you could be entitled to a financial allowance for this.