Cracking the Mis-Sold Pensions Code

Pensions are widely viewed as a guaranteed pot of gold for people coming into retirement. Unfortunately, thousands of individuals are unknowingly mis-sold their pension plans every year due to bad or negligent investment advice, or the risks were not made clear. Some advisors are downright crooks. Consequently, people end up with an investment plan that is risky or illiquid.

Mis-sold pensions code - image for articleGiven the long years of hard graft you’ve invested in your pension, this can leave you feeling frustrated, disheartened, stressed, and ultimately uncertain of what to do next.

What is Financial Mis-selling?

There are many ways you can end up being a victim of mis-sold pensions. Most people are typically unaware that they have fallen into a trap. Pension scammers usually contact unsuspecting victims out of the blue through email, phone, text, and even via online advertisements. They may also be introduced to you by friends or family members who are similarly unknowingly being scammed.

Scammers come with attractive offers to convince you to transfer your pension or release a portion of the funds to them. The scammers often advise you to invest in strange, high-risk opportunities. In worst-case scenarios, they simply disappear with your money, never to be heard of or seen again.

What are Some of the Possible Warning Signs?

Although some of the investments fronted by financial advisors may be genuine, many of them are high-risk and are not regulated by the Financial Conduct Authority (FCA). This means they could deplete your pension funds if they go south. The FCA is a UK financial regulatory body that operates independently of the Government.

Cold calls

A cold call is a sales call to a consumer who did not know that they were going to be called or why. Sales people make cold calls to cold leads. Victims typically get a telephone call from somebody working for a company that they have never heard of. This person claims that his or her company can provide you with a better pension deal if you switch policies now. They sound convincing and the supposed deal they put forward sounds fantastic.

Free Pension Reviews

Although not all pension reviews are scams, some are. Marketing operations are normally not qualified to offer sound financial advice. Given that they are not regulated or monitored by the FCA, investors who do what they advise run a higher risk of losing out compared to their counterparts who listened to FCA-regulated firms

If your pensions advisor does not explain some of the risks that your funds could face, they are clearly mis-selling.

Overseas Investments

Some high-risk investments exist in domestic markets, while others – a huge number – occur abroad. If you are offered fantastic deals regarding villas or hotels abroad, tropical islands, farm land, or green energy initiatives in an emerging economy, beware!

Thousands of unsuspecting victims have also been advised to invest their pensions in overseas securities that they know nothing about.

Not regulated by the FCA

If you suspect that you are a victim of mis-selling, there are certain legal routes you can follow. You can file a complaint with the Pensions Ombudsman through the Financial Ombudsman Service.

The Pensions Ombudsman investigates complaints regarding pension funds in the UK. However, there is a time limit of three years from when you realized or ought to have noticed that something was wrong, or six years from when you were sold the product. You should first try to get in touch with your pension provider.


Interesting related article: “What is a Pension?