Selling pensions has been one of the most profitable ventures in the financial sector for almost four decades. Unfortunately, most of them have been subject to mis-selling pensions. This situation has meant significant losses for the senior citizens from mis-sold pensions. Some have even lost everything intended for their Golden Years.

There are numerous complaints that independent financial advisors are currently dealing with relating to mis-sold pensions. A report by the FCA found that many customers were under-advised by their IFAs and banks.

Occupational Pension Schemes (OPS)

The occupational pension schemes are often started by employers to help their staff save for retirement. However, the pension schemes are unregulated and can lead to mis-sold pension.

OPS fall into three categories that include cash balance plans, contributory pension schemes, and benefit pension schemes. Most of the employers will match the contribution of the employees when saving into the program.

SSAS Pensions

The small self-administered scheme is for a handful of directors by the employer. The charges are per plan as opposed to individuals. SSAS is best suited for business owners looking for a way to save and support the company in the future.

In 2012, the FSA and FCA warned retail customers that the scheme was not best for them. Unfortunately, some business owners have lost money through mis-sold pensions in SSAS.

QROPS Pensions and Defined Benefit Pension

The Qualifying Recognised Overseas Pension Scheme is perhaps one of the most popular for expatriates. However, an investment in the QROP can be a significant mistake.

Some of the transfers to QROP have often been to organisations that are not adequately regulated. The initial contact after a cold call will make the investment sound great. Nonetheless, information on alternatives and the nature of investment may not be available to the pensioner. The promise of new pension and lump sum payments from overseas will sound attractive, and the pensioners will commit in droves.

The fact is that investment firms and brokers make a killing from selling this form of pensions. The commission rates are attractive to the investment companies, but the pensioner will not benefit that much.

Most of these pension scheme plans are not good options for you, and the chances of ending up with a mis-sold pension are high.

The defined benefit pension has been another conduit for mis-selling where members unknowingly sign up to high management fees, punitive exit fees, and high-risk investments. For example, the defined benefit pension mis-selling occurred where members of the British Steel pension scheme were subjected to pension transfers worth £1.1 billion.

Self-Invested Pensions (SIPP) and Annuity

The pension schemes were typical in the UK, and they sounded great. It seems that investors lost hordes of savings from the plan.

The main characteristics of SIPP pension schemes are a high charging model and high-risk investments. Some of the people may have transferred their pension or that of the company to a scheme after promises of high returns.

If you are already into this pension scheme, it would be a good idea to check the current charging structure, and how much it is currently worth. SIPP claims maybe your next course of action.

On the other hand, a mis-sold annuity is where the pension introducer sold an inappropriate pension scheme to the customer. The customer does not get accurate or sufficient information regarding the pension scheme. However, annuity claims are still possible.

The next step

Mis-sold pensions can include the final salary pension transfer where a financial advisor encourages you to transfer the money from a final salary pension scheme.

If you are dealing with a mis-sold pension or mis-sold annuity, check how much it is worth and how much you can get from the claims. You can as well get claims advice regarding final salary pension transfer after determining your pension was mis-sold.

Final Word

You should always take time to review the various pension plans and seek a second opinion from an independent financial consultant. Don't listen so much to the pension introducer as their primary goal for them is to make a sale.

If you're thinking about making a change, don't be too quick to sign up into a pension scheme you are not familiar with. Get claims advice from independent financial advisers and let them guide you in making SIPP claims, annuity claims or others.