What is a Mis-Sold Pension?

We hear about mis-selling all the time specifically around payment protection insurance. However, we forget that vast numbers of other policies were mis-sold on a daily basis. Investments mortgages, life-insurance and of course pensions.

There are many types of pension arrangements that individuals can get involved in, and these are becoming scrutinised by the financial conduct authority, as to how they are handled by the financial adviser promoting the various products and schemes.

The schemes themselves can involve DB Transfers, Sipps and Annuities, and due to the values of pension pots, this can create incredibly attractive earnings for the financial adviser, which of course is the main reason behind mis-selling.

In respect of DB transfers, there is another element which needs to be taken into account concerning the mis-sale, and that is the regulator. The financial conduct authority is involving itself concerning transfers that the people are undertaking with their pension pots, from defined benefit schemes to personal pensions. The increase in the value of the scheme to a private pension is enormous and for example, a person who had a guaranteed pension of £10,000 a year could well have a transfer pot value of over £600,000. In some ways, it is madness not to take the option to move it to a private pension scheme. However the regulators are taking a view on this, and as such, if the areas are not dealt with correctly by the financial advisers, they could suffer recourse.