If your pension transfer or pension product is mis-sold, or you receive unsuitable financial advice regarding your pension, you could potentially lose a colossal sum of money.
Thankfully, if any of these scenarios occur, you can complain to your financial adviser – or about them – and get the compensation you deserve to put your retirement plans at least partly back on track. Depending on your pension product, you may also be able to claim compensation if your provider fails or if your “pension” turns out to be a scam.
One of the most common questions our team of pension mis-selling experts receive when people first contact us is, “How much mis-sold pension compensation can I get?”
Let’s try and answer that question.
What is the purpose of pension compensation?
Generally speaking, the purpose of pension compensation is to return you to the financial position you would have been in had you not received unsuitable advice.
However, as we’ll see as we go through this, this isn’t always possible, and, unfortunately, many people get far less in redress than their actual losses.
What is the average compensation for a mis-sold pension?
As each individual’s pension and circumstances differ, and most firms don’t disclose how much mis-selling compensation they pay, it’s impossible to answer this question accurately and confidently. Many pension mis-selling specialists say “between £25,000 and £50,000”, but these are ballpark estimates based on their own experience and what they tell their clients. And there’s a big difference between those numbers!
However, as the Financial Services Compensation Scheme (FSCS) publishes figures about its payouts, we do know that the average claim value for pension mis-selling that it deals with is £74,945.
This is a significant sum of money that could help put your retirement plans back on track if you received unsuitable pension transfer advice or were a victim of pension mis-selling.
And depending on your circumstances, you could get an even more significant sum!
What if my financial adviser or pension provider is still in business?
If your financial adviser or pension provider is still operating, you could, in theory, at least, recover all of your losses.
However, if your adviser or pension provider disagrees that you were mis-sold, you would need to complain to the Financial Ombudsman Service (FOS). The FOS can order an adviser or provider to pay compensation of up to £375,000, depending on when the advice was given or when you opened the pension product in question. And if you lost more than that and your adviser or provider had the opportunity to cap their losses, are they likely to agree they mis-sold you your product?
You can learn more about how to complain and the pension claim process if your adviser or pension provider is still in business in our final salary pension transfer mis-selling guide.
What if my financial adviser or pension provider is no longer trading?
If your financial adviser or pension provider fails, then the FSCS will deal with your complaint and pay out any compensation you are owed.
The FSCS compensation cap is £85,000, much lower than what the FOS can award but still a significant sum of money.
If you lost less than £85,000 and have to complain to the FSCS, you at least have the consolation that you’ll be able to get all your money back.
Can I claim for the psychological impact of losing money?
It depends on the circumstances behind your mis-sold pension and how you have been affected. In some cases, you may be able to claim additional compensation for psychological distress or even for conditions like post-traumatic stress disorder.
However, claims like this tend to be rare. After all, if a financial adviser or pension provider doesn’t exist anymore, there’s no one to bring such a claim against!
Discover if you’re due pension mis-selling compensation with LawPlus Solicitors!
Whether falling victim to pension mis-selling has seen you lose a relatively small pension pot or you’ve seen your retirement plans go totally up in smoke, LawPlus Solicitors is here to help you get the compensation you deserve.
Contact us now for a free, no-obligation review of your pension transfer advice or pension product and take the first steps to getting your money back and putting your retirement plans back on track.