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Special post just for our UK readers!

If you’re struggling to manage your UK pension, check out these tips from fellow S&S reader, Kim.

How to Manage Your Pension Productively

You’ve worked hard all your life and want to make sure that you have a strong pension pot to support you during the later years.

A partial or complete transfer of your pension to earn a higher return deserves knowledgeable and honest advice from professionals. Unfortunately that’s not always the case.

In the UK, according to the FSCS (Financial Services Compensation Scheme), compensation payouts for mis-sold pensions exceeded 40 million in 2018. That’s twice the value of the payouts made in 2016 and the result of around 10 billion worth mis-sold pensions!

Aside from the spike in compensation payouts, there’s also been a significant increase in transferred pensions. In 2018, around 37 billion worth of pensions were transferred. So we wanted to provide a brief on how to manage your pension productively to enjoy a quiet and relaxed retirement.

Read on to learn about mis-sold pensions, SSIP claims, mis-sold annuity, annuity claims, SSAS and QROP.

Mis-Sold Pensions

For most, pensions are complex arrangements. Sometimes, they’re so complex that it’s difficult to recognize whether your financial advisor recommended the right pension for you. But all pension advisors are obliged to sell you the most suitable financial product.

During the last few years, the UK has witnessed a spike in the number of claims against pensions companies. The increase of claims for mis-sold pensions highlights how many people lost money because of poor-quality advice. Many consumers are not clear about their options and they’ve withdrawn huge amounts of their pension without the right advice.

The FSCS reports strong concern on the quality of advice provided to people who seek-out guidance on how to reinvest their pension. The Financial Conduct Authority (FCA) has investigated regulated and unregulated advisors and found that about half of the reviewed advice was suitable.

You’re eligible to claim compensation for a mis-sold pension if you’ve received incorrect advice about a financial product, the risks weren’t highlighted, or you’ve received incomplete information. For example, you could receive a call from an unregulated pension introducer. The illegal pension introducer always recommends specific investments because he’s focused solely on the commission.

Also, to choose the right product for you, the financial advisor should find out about any medical issues. If the pension advisor doesn’t ask about health related matters, you may claim mis-sold annuity, The FCA states that a financial service must be offered in a clear and fair manner. The easiest way to get claims advice is to contact a specialist firm.

What is a Defined Benefit Pension?

The defined benefit pension involves an amount paid to you calculated on the average salary you’ve earned and the number of years you’ve been employed. It pays out a lifetime income, which increases annually. Your employer contributes money to the DB and makes sure that you have enough money for your retirement.

About Self-Invested Personal Pensions

A Self-Invested Personal Pension (SIPP) is a type of pension suitable for people who are experienced investors. It makes it easier for you to manage your pension, thanks to the wide range of investment opportunities available. Although traditional pensions offer up to several hundred funds, SIPPs open the doors to new investment opportunities.

In the UK, many people transferred money into SIPPs with promises of an enormous ROI. But the investments proved to be worthless. The problem, however, lies in the investments made through the SIPP because they’re usually high risk, speculative and illiquid.

People who’ve lost money, can submit SIPP claims for mis-sold pension. Eligibility for SIPP claims includes cases when the guaranteed earning wasn’t reached, you’ve incurred significant additional costs or you were mis-informed about the investment’s risks. The most efficient way to get claims advice is through a solicitor. Also, you can use the Pension Wise free service to receive reliable advice about annuity claims or final salary pension transfer.

An Overview on SSAS

The Small Self-Administered Scheme (SSAS) is suitable for small businesses or partnerships. It’s a pensions scheme comprising up to 12 members. They’re established by managers for their family and themselves. The family members may or may not be employees of the company. You can either hire an independent trustee or the members can be trustees. The trust can borrow and lend money to the company for different investments. When they retire, the members of the trust can choose to receive a tax-free lump sum or recurring income.

About the Qualifying Recognized Overseas Pension

The Qualifying Recognized Overseas Pension (QROP) scheme is a method to transfer your pension overseas. It’s recognized by the HMRC and refers to a pension established abroad, which is identical or has equivalent UK pension standards. You can easily transfer your savings in such a scheme, if you want to move outside the UK.

Wrapping It Up

The UK has registered a spike in mis-sold pensions claims. And compensation claims have exceeded £40 million in 2018. If you believe you’re the victim of a mis-sold pension, contact a claims expert. You’ll also receive advice about the most beneficial final salary pension transfer method, annuity claims or SIPP claims.