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“I am extremely grateful for what your claims team has done for me, without your help and advice I would never have done anything regarding my SIPPS Pension, I would never have thought the outcome would be as it was. I would definitely recommend your company – Miss M
“I’d like to thank all the staff. Thanks to you all I can now see a future when I retire. I was very anxious and lot of stress has been lifted. It was an absolute pleasure dealing with you all and I am more than satisfied with the outcome” – Mr. L
“I can’t fault your services it has been a complete pleasure dealing with yourselves. I thought I’d lost all my pension money and I can’t thank you enough, not only for winning my pension claim but for showing me I can now relax into retirement.” – Mr P
The Original Pension Misselling Scam
Have you ever heard of the pension misselling scandal of the 1980s? It’s also something that is quite unique to the UK thanks to the way the government handles social security. In any case, it was a huge scandal that broke out back in the 1980s due to a large amount of the workforce who were duped into opting out of their company pension scheme into transferring to a personal pension plan offered by private providers but with little or no safeguards or even any guarantee that they would make the same amount projected in the personal pension plan sold to them. This practice of selling pension plans without properly informing the buyer of the risks involved basically sparked the pension misselling scandal of the 1980s.
Things all began when the state began to encourage people to actually opt out of their government social security plans to pursue personal pension plans. It began in earnest in 1978 when the UK allowed employers under the State Earnings Related Pension to opt out if their occupational pension scheme could provide equivalent benefits. At this point, these reforms were welcome as they guaranteed the same amount of benefits would redound back to the employees even if their pension plan was not provided by government.
However, in 1986, the new Social Security Act gave the individual employees even more freedom with their pension plans by allowing them to contract out of the State Earnings Related Pensions and migrate to a personal pension plan. This began a wave of personal pension plan sales from insurance companies thanks to their aggressive advertising schemes. The pension sales actually peaked at 5.5 million people, but it soon became clear that people were actually worse off with their new personal pension plans that offered fewer benefits and guarantees and had more charges than their original State Earnings Related Pensions.
The Rise Of The New Pension Misselling
While you might think that people should have learned their lessons from the pension misselling scandal of the early 90s, the reality is that almost everyone has a short-term memory. As a result, pension misselling is now on the rise again with a number of poorly performing self-invested personal pensions already identified in recent times. It estimated that their total worth reaches up to £10 billion – and most of these were missold by unscrupulous financial advisors hoping to turn over a quick sale.
Nowadays, the government has taken steps to crack down on pensions misselling again and as a form of damage control, everyone who has been convinced to opt out of their SERPS are encouraged to take this issue seriously and to attempt to recover their losses as soon as possible. The government has also put up a £120 million fund to compensate losers so far. Of course, the maximum amount you can recover under this fund is only £50,000. Fortunately, this ceiling is set to grow up to £85,000 as the claims continue to grow.
If you feel that you have been missold a pension, then don’t be embarrassed about it and try to recover your losses as soon as possible.
If you’ve got any questions regarding this or you’d like to know more about making a claim, please call our pension misselling team on 0161 850 9069.