If you received unsuitable advice about transferring your pension, like Adrian from Wales, FSCS can help
Consolidating several pensions might seem like the obvious thing to do but every year FSCS hears from thousands of people who have lost out due to unsuitable advice.
Adrian*, aged 66, from Wales received £85,000 in compensation from FSCS having been given unsuitable advice to consolidate multiple pension pots into a Self-Invested Personal Pension (SIPP).
Six years ago, Adrian was introduced to a financial adviser. Having worked five jobs over the course of his career, the adviser explained that Adrian could consolidate all of the pension pots he had acquired from each job into one single fund and reinvest it. The major benefit of this, he was told, was that he would be entitled to a tax-free lump sum if he decided to proceed.
Adrian explained: “Not a lot of people understand pensions until closer to retirement age. I’d started to take an interest in my pension, so I gave him permission to look into this further on my behalf.”
The financial adviser came back some weeks later with a package: a total pension value of £587,000, of which he would receive £147,000 tax free – leaving over £400,000 in his pot to be reinvested. “I could move house without going into debt, and I would still have enough money left over to retire early.”
Adrian went ahead with the transfer – as did members of his family, friends, and colleagues. But before long, the value of his pension started to quickly drop. After the first year, the £400,000 he had kept in his consolidated pension pot was rapidly falling. The value continued to drop, and today just £127,000 remains. “I’m still having to work today to boost it. My health has deteriorated, so I’m currently only able to work a three-day week. It’s put so much stress on me.”
When Adrian discovered that he lost a large majority of his pension fund, his son recommended that he check with FSCS whether he would be eligible to make a claim. “The problem is, it was all too much for me at the time. The language of the pension funds and SIPP providers was beyond what I could understand. So I went to a solicitor, who took the claim to FSCS on my behalf.”
Adrian received the full compensation amount of £85,000 on account of being given unsuitable pension advice, with his solicitor receiving 25% as their fee.
“I’m now reinvesting the money I’ve got back cautiously so I can retire as soon as possible. I’m rebuilding, but it’s going to be a long road. I’ll still have to work to pay the bills.”
And Adrian isn’t the only one who FSCS have helped get back on track having received unsuitable pension advice.
Karl Hayes, aged 66, from Peterborough lost almost £55k after transferring three pensions into a SIPP in 2013 but FSCS were able to help him get all his money back when the adviser he used went out of business earlier this year. And George Halliday, aged 67 from Midlothian in Scotland got £48,000 in compensation from FSCS having been badly advised to transfer his final salary pension into a SIPP in 1992.
If you have been wrongly advised to transfer your pension(s) you can check if you can claim through FSCS by visiting https://claims.fscs.org.uk/ . You can also contact our Customer Services Team on 0800 678 1100 or 020 7741 4100, or by email at firstname.lastname@example.org.
*Customer anonymity disclaimer: This is a true customer story. At the customer’s request, we have used the name ‘Adrian’ to protect their anonymity.
- Email: email@example.com