Pension Claims in General Overview
Since the late 1980s, pensions have been frequently transferred from one product (or provider) to another. Whilst these transactions have often resulted in the financial services industry being very well remunerated, in many cases, the financial advice to transfer was not suitable for the consumer and has lead to a substantial, or even sometimes a total loss of pension funds for some people.
Different Pension Types
Self-Invested Personal Pension (SIPP)
In most cases, the transfer to a SIPP has usually been followed by the subsequent purchase of high risk, illiquid, underperforming alternative investments, with higher annual charges. SIPP operators have also been heavily criticised for the lack of due diligence and background checks carried out on these product providers. This has resulted in many complaints against both the adviser that gave the original unsuitable advice to transfer the pension and the SIPP operators themselves. Find out more about SSIP schemes here.
Final Salary Transfers
With in-built guarantees, it is rarely suitable to transfer this type of pension to any other form of pension product or provider. This is because the guarantees are lost forever when the transfer takes place. A Final Salary transfer is where your employer takes into account your final salary at the time of retirement and offers a transfer value that relates to your last known pay. Want to find out more about Final Salary Transfers? Get in touch today for expert advice.
Free Standing Additional Voluntary Contribution (FSAVC)
In the vast majority of cases, ‘in-house’ AVC’s have proven to be far more suitable. Similar to an Occupational Pension Scheme, an FSAVC does not hold any limit on how much you can pay into your pension fund a month, and as of April 2006 this figure can be 100% of your earnings if you so wish. Having a Free Standing Voluntary Contribution puts you in control of how much you can save for retirement, and is a great option if you like to have flexibility with your outgoings. See more from Free Standing Additional Voluntary Contributions here.
Small Self-Administered Scheme (SASS)
Often set up by non-FCA-regulated entities such as sales agents and/or alternative product providers to hold high risk, illiquid, underperforming alternative investments. Transfers to a SSAS were often made in an attempt to avoid stringent, safeguarding regulation. Successful claims for compensation are dependent on proof that a regulated financial adviser provided unsuitable advice to transfer an existing pension into a SSAS. Please note that unfortunately, in the majority of cases we have seen, regulated financial advice was not provided.
Occupational Pension Scheme (OPS)
Often set up by unregulated entities to circumnavigate the regulated (advice) process. An Occupational Pension Scheme is often referencing an account that your place of work set up to help you
save for your retirement. Usually an OPS falls under three categories:
- Defined benefit pension schemes
- Defined contribution pension schemes
- Cash balance plans
Often, workplace pensions require your employer to also pay in and contribute towards your pension, the majority of the time this matches the sum that is deducted from your monthly/weekly wage.
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