Pensions are a vital part of planning for the future, providing the income you will need when you retire and are no longer working. For many of us, pensions are not something we think about much—until we hear about schemes that promise higher returns or even the chance to retire early.
Some of these schemes claim to offer more control over your investments, while others promise guaranteed benefits or high returns. But these are rarely as good as they seem.
Thousands of people across the UK have fallen victim to mis-sold pensions, where they were encouraged to transfer their pension into risky or unsuitable schemes. This has left many with significant financial losses and serious concerns about their retirement.
If you have been persuaded to move your pension into a high-risk or inappropriate scheme, you might have been mis-sold your pension. In this article, we will help you understand what mis-sold pensions are, how to spot if you have been affected, and why making a compensation claim could be the right step to recover your losses.
What Is a Mis-Sold Pension?
A mis-sold pension occurs when you are given poor pension advice by a financial adviser or company and encouraged to transfer your pension into a scheme that is inappropriate for your circumstances. This often involves moving pension savings into high-risk or unregulated pension investments, which can result in the loss of a substantial portion of your retirement funds.
In addition, if your pension provider allowed you to withdraw your pension in a lump sum and you subsequently lost those funds—whether to a scam or a poor investment—you are also eligible to make a claim.
Common types of mis-sold pensions include:
- Self-Invested Personal Pensions (SIPPs): These are pensions where you have greater control over your investments, but they can be risky if you are not experienced in managing them.
- Final Salary Pension Transfers: A final salary pension scheme offers guaranteed benefits and transferring out of one can expose you to greater risks without adequate returns.
- Unregulated Pension Schemes: These schemes are often presented as high-return investments but carry significant risk, especially if they are unregulated by the Financial Conduct Authority (FCA).
Mis-selling can happen in several ways, including pressure to transfer quickly, misleading claims about returns, or a lack of information about the risks involved in the new pension plans.
How to Tell if Your Pension Was Mis-Sold
If you have been misled about the pension scheme you were advised to join, or if you were not properly informed of the risks, you may have been mis-sold your pension. Some common signs include:
- You were offered a free pension review, which led to advice to transfer your pension.
- Your financial adviser promised high or guaranteed returns that sounded too good to be true.
- You were not informed about the high risk involved in the new pension investments.
- You were encouraged to transfer your pension from a secure final salary pension scheme to a more volatile option, such as a SIPP.
- Your adviser did not consider your circumstances, such as your risk tolerance or long-term financial goals.
Why You Might Want to Claim Compensation
If you have been mis-sold a pension, it is essential to consider making a mis-sold pension claim. This can help you:
Recover Financial Losses: The primary reason for claiming compensation is to recover money lost due to poor or unsuitable pension advice. A mis-sold pension can seriously affect your retirement savings, and compensation can help to restore some of that lost value.
Correct the Mis-Selling: Many people are unaware that they have been mis-sold their pensions until it is too late. A successful claim can provide closure and help ensure that others are informed about pension scams and risky schemes.
Legal Support: Seeking compensation allows you to enlist the help of experts who can navigate the claims process on your behalf. At CEL Solicitors, we specialise in supporting people who have fallen victim to mis-sold pension schemes and can guide you through the steps of making a claim.
Companies Linked to Mis-Sold Pensions
Several companies have been linked to mis-sold pensions, and their actions have caused significant financial harm to individuals across the UK. These schemes often offered high returns but failed to deliver, leaving people with far less than expected. Some of the most notorious schemes include:
- Ark Pension Scheme: This scheme engaged in “pension liberation,” which allowed early access to pension savings. However, many participants were unaware of the heavy tax penalties involved.
- Capita Oak and Henley Retirement Benefit Schemes: These schemes misled individuals into investing their pensions in high-risk and unregulated investments, causing major losses.
- London Quantum Pension Scheme: Like many other schemes, this involved moving pension savings into unsuitable investments that carried a significant level of risk.
- Dolphin Trust (German Property Group): This property investment scheme collapsed, leaving pension holders with substantial losses and little chance of recovery.
- Park First: This scheme involved investments in airport parking spaces, which were found to be unsuitable for most investors due to the high risk and lack of security.
How to Make a Mis-Sold Pension Claim
If you believe you have been mis-sold a pension, the first step is to seek expert advice on your situation. CEL Solicitors can help you gather evidence and start the claims process.
The process typically involves:
Reviewing your case: A solicitor will assess the advice you were given and the pension investments you were encouraged to make.
Filing a claim: Your solicitor will file a claim with the appropriate body, such as the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS), depending on your case.
Compensation process: Once your claim is filed, it will be reviewed, and if successful, you will be awarded compensation for your losses.
TEL CEL
Mis-sold pensions can have devastating effects on your pension savings, but you do not have to face this alone. If you have fallen victim to a pension scam or poor financial advice, acting quickly and exploring your options for claiming compensation is essential. At CEL Solicitors, we are committed to helping people affected by mis-sold pensions get the justice they deserve.
Contact us today by calling 0333 242 7128 or completing an online form for a free consultation. We will help you understand your rights and guide you through claiming compensation for your lost retirement funds.
