CLAIM COMPENSATION FOR PENSION LOSSES
Did you transfer your Final Salary Pension?
If you transferred your pension after taking advice and lost money you may be entitled to claim compensation. Claims can be worth £100k’s so it’s wise to check now.
What is a pension claim?
If you previously had a ‘defined benefit’ or ‘final salary’ pension which you transferred after taking advice from a pension company rep or Independent Financial Advisor (IFA), then you/we may be able to prove you acted on unsuitable advice and can claim compensation for your losses. Most people don’t realise that in most cases, losses occur upon transfer, therefore, even if the subsequent pension performs reasonably, there could well be a substantial deficit.
Understanding Final Salary/Defined Benefit
Final Salary pensions are as good as pensions get. They provide a ‘defined benefit’ upon retirement linked to the length of employment. Each year of pensionable service results in you attaining a 1/40th, 1/60th or 1/80th of your final salary upon retirement. Therefore, someone with 40 years’ service in a 1/60th scheme, will qualify for 40/60th’s (2/3rds) of their final salary for each year in retirement.
These types of pensions are so good they are rarely offered. This is because the cost to the employer is simply too high. They provide a guaranteed income in retirement, do not attract charges, and are not linked to the financial markets, therefore hold no investment risk to the member.
“Less than half received good advice”
A recent Financial Conduct Authority report shows just 48.1% of people (in their survey) who transferred their final salary pension were correctly advised. However, our experience tends to confirm that this figure could be much lower when assessing transfers that took place between the late 1980’s and the present day.
Who advised you?
Who you took advice from makes a difference to how much compensation you can get. That’s because claims to the Financial Services Compensation Scheme (FSCS) are capped (see table below), whereas claims against an Independent Financial Advisor (IFA) or pension provider are not.
Advised by a Pension Rep?
If you were advised by a representative of a pension provider, such as Royal London, Prudential or Standard Life for example, then the claim is against the organisation and is not capped. In this instance, a claim can be brought for your ‘total losses’ which take into account the ‘put back’ methodology. This means the compensation pay out aims to ‘put you back’ where you would have been financially if you had not been mis-advised to transfer your pension.
Advised by an IFA?
If you were advised by an Independent Financial Advisor (IFA) then the claim is against the regulated company and is not capped. In this instance, a claim can be brought for your ‘total losses’ which take into account the ‘put back’ methodology. This is exactly the same as being advised by a pension representative and you can claim the ‘put back’ methodology. This means the compensation pay out aims to ‘put you back’ where you would have been financially if you had not been mis-advised to transfer your pension.
Who are the pension companies?
This list is only the most common pension companies that you could have had a pension with. This list is not exhaustive. If you were advised by a representative of any of these companies to transfer your pension out, you may have a claim.
Legal & General
Over 95% success rate
Our legal and claims partners achieve approx. 97% success rate with claims settled by the FSCS, and above 80% success rate when claims are rejected by the Pension Provider or IFA, that are then referred to, then decided by the Financial Ombudsman Service (FOS).
What evidence do I need?
Our legal partners will work with you to assess all the evidence available from yourself and the third parties. Our aim is to build a case that proves you acted on unsuitable advice. Some of the following evidence may be useful. Don’t worry if you don’t have what’s listed here, our legal partners can work with you to build a case and help you build the evidence you need to make a successful claim.
Emails or letters
Any communication that you received in writing relating to the transfer of your pension would be useful evidence. This could be emails, letters or text messages confirming the advice you were given.
If you have the name of the pension company or contact details of the company representative or IFA then these details will help us with our investigations. But don’t worry if you don’t have them anymore, we understand for some this was a long time ago. Our legal partners will always do their best to establish your situation.
Who can claim?
Take a look at the table below to see if you worked in any of the industries or companies, if you did you may have a claim for compensation.
Have you worked in any of these industries?
Final salary pensions were common in many nationalised industries such as those listed below.
- British Steel
- British Coal
- British Telecom
- Local Government
- Civil Service
- Armed Forces
- Emergency Services
- Vehicle Manufacturers (Rolls Royce, Nissan, Ford etc)
- Banking/Financial Services
- Aerospace (BAE Systems, British Airways)
- Utilities (United Utilities, Wales & West Utilities etc)
Please note, this is not an exhaustive list of the industries that provided final salary/defined benefit pensions.
Did you have a pension with any of these companies?
The companies below represent many of the companies we have claimed against, the main two are Aviva and ReAssure.
- Legal and General
- Allied Dunbar
- Friends Life
- Friends Provident
- Pearl Assurance
- Scottish Widows
- Scottish Friendly
- Canada Life
- Royal London
- Britannic Assurance
- Sun Life
- Sun Life of Canada
- Phoenix Life
- Colonial Mutual
- Liverpool Victoria
- Commercial Union
- General Accident
- General Portfolio
- Windsor Life
Please note, this is not an exhaustive list of the companies that accepted transfers of final salary/defined benefit pensions, into their pension products.
If you transferred a final salary/defined benefit pension, then you may have a claim.
How much can I claim?
Claims can be capped depending on a number of factors such as if the company advising has gone bust and the date they went bust. The table below explains the caps and the different factors.
|Firm Advising You||Compensation Limit|
|Went bust before 2010|
Capped by the Financial Services Compensation Scheme
|Went bust between 2010 and 1st April 2019|
Capped by the Financial Services Compensation Scheme
|Went bust after 1st April 2019|
Capped by the Financial Services Compensation Scheme
|Firm is still trading but rejects your complaint and you took advice before 1st April 2019|
Capped by the Financial Ombudsman Service
|Firm is still trading but rejects your complaint and you took advice after 1st April 2019|
Capped by the Financial Ombudsman Service
|Firm is still trading and accepts your complaint with no Financial Ombudsman Service intervention|
Please note, our legal partners are Money and Me Solicitors Ltd (MMS), who previously operated as a claims management company, Money and Me Claims Ltd (MMC). These case studies were achieved by either MMC or MMS.
HM Forces Case Study
Having served with the Armed Forces from August 1976 to April 1988, Mr John W, acted on, what has now been proven to be unsuitable advice, and in August 1991, transferred his Armed Forces Pension Scheme 1975 Section (AFPS) into a Personal Pension arrangement with Windsor Life (taken over more recently by ReAssure). The Service Personnel & Veterans Agency confirmed that the amount transferred was £9,950.97. By May 2022 this had grown to a value of £62,944.20.
“Money and Me took care of everything, they were approachable at all times, and explained things to me clearly, setting my expectations fairly.
A great experience and result, with something I wouldn’t have known where to start, let alone complete myself.”
Mr J Waddle.
Despite being a member of the AFPS for less than 12 years, MMS established that had Mr W remained in the AFPS, the equivalent ‘hypothetical value’ of that pension would have been £179,504.95. This meant that he had suffered an actual loss of £116,560.75
On 29th June 2022, ReAssure agreed to award Mr W £116,560.75 in compensation for the losses he’d suffered.
If John’s case sounds familiar, you could have a claim for pension compensation which could be £10,000’s or even £100,000’s. Complete our 5 min check form and our legal partners will get back to you within 24 hours.
BMW Case Study
In March 2013, with promises of better financial returns, Mrs Fletcher acted on, what has now been proven to be unsuitable advice, and transferred her BMW (UK) Operations Pension Scheme into a Self-Invested Personal Pension (SIPP) arrangement. The amount transferred was £43,642, which represented full encashment of her BMW Scheme. The money was transferred into a bank account incorporated within the SIPP, and from this, after paying various fees, Mrs Fletcher invested £40,000 into Dolphin Capital.
Mrs Fletcher's Testimonial
“The whole process was pain free, even when certain third parties were not ‘playing ball’ Rita was pivotal to progressing my case efficiently. Having received two successful pay-outs and being treated professionally throughout, I would have no hesitation in recommending Money and Me. With a few financial commitments on the horizon, the timing of the compensation could not have been better! Thanks to all the team, particularly Rita.”
MMC were appointed at the end of June 2020. In October 2021, MMC established that had Mrs Fletcher remained in the BMW Scheme, the equivalent ‘hypothetical value’ of that pension would have been £217,776.74. Taking this figure, fees paid, and the overall value of her Self Invested Personal Pension (SIPP) into account, it was confirmed that she had suffered an actual loss of £218,135.94.
On 18th October 2021, the Financial Services Compensation Scheme (FSCS) awarded Mrs Fletcher £50,000 in compensation for the losses she had suffered relating to the unsuitable financial advice she had received. At the time, this was the maximum payment she was entitled to receive under the FSCS rules. In addition to this, she was also awarded £40,349.62 in compensation for the failures of her SIPP provider relating to the investment into Dolphin Capital.
If Mrs Fletcher’s case sounds familiar, you could have a claim for pension compensation which could be £10,000’s or even £100,000’s. Complete our 5 min check form and our legal partners will get back to you within 24 hours.
How, and when do I pay for Money and Me Solicitors (MMS) services?
Our legal partner, Money and Me Solicitors adopt a ‘No Win, No Fee’ service. The ‘No Win, No Fee’ arrangement will be explained to you thoroughly prior to receiving the Client agreement to review.
What do Money and Me Solicitors (MMS) charge for their services?
In the vast majority of cases, 25% plus VAT of your award. In the unlikely event that your case is considered ‘high risk’, then the fee could increase. However, this will be agreed with you prior to you officially appointing MMS to manage your claim, and it will NOT change.
How is compensation paid?
Generally, compensation is paid as a cash payment. Occasionally, the company/entity that is liable for paying the compensation offers to contribute into a pension scheme, however, if preferred, this can usually be exchanged for a cash payment, with certain deductions for tax, etc. Options will be explained to you at the point of a successful outcome.
How is compensation calculated?
Our legal partner, Money and Me Solicitors review your situation, particularly the advice that you were given to transfer your (defined benefit/final salary) pension. If it is the case that you have acted on unsuitable advice, then they aim (subject to any limits applied) to ‘put you back’, to the financial position you would have been in, had you not acted on that advice. To do this, they establish what would have been the financial benefits of your previous (defined benefit/final salary) pension, compared to the current monetary value of your existing pension. The difference between the two would be classed as the loss/damages suffered, and therefore it would be this amount that they would aim to recover for you.
Will claiming, and/or receiving compensation affect my existing pension arrangements?
No, not at all. Example: Client A transfers £10,000 from a defined benefit/final salary pension into a personal pension in 1995, which has grown to £50,000 by the time a claim has been finalised. It is established that had Client A remained in their defined benefit/final salary pension, their benefits would have been valued at £150,000. The £100,000 difference is paid as compensation and the existing pension (of £50,000) remains in place.
How long does it take to complete a claim?
Our legal partner, Money and Me Solicitors aim to have their investigation complete within a 3 – 6-month period of being appointed, then depending upon whom the claim is against, it can take anywhere between an additional 6 – 12 months to obtain a decision and subsequent payment of compensation. Therefore, it could take between 9 – 18 months to complete.
What is the amount I can expect to receive from a successful outcome?
Subject to any limits, upon successful outcome, you can expect to receive the difference between the (hypothetical) value of your previous pension compared to your existing pension arrangement. If the company that provided the advice has gone bust, then your claim would be prepared then presented to the Financial Services Compensation Scheme (FSCS), who apply limits of £48,000, £50,000 or £85,000 depending on when the company that provided the advice went bust. Please see the table above for compensation limits.
Who will Money and Me Solicitors be claiming against?
Any UK regulated entity that we feel failed in their regulatory duties to you. This is generally financial advisory companies or companies that offered advice through their network of advisors. Subject to losses/damages suffered, it is not unusual for MMS to lodge more than one claim. Again, this will be explained to you thoroughly, prior to receiving the Client agreement to review.
Do I have to appoint Money and Me Solicitors or any other specialist company to assist me?
No, you can, if you feel you have the time and inclination, manage the claim yourself. Please be aware that pension claims can be very complex and time consuming. However, it is always your decision whether to appoint a professional to manage the claim on your behalf.
Don’t Delay. Check Now.
Don’t miss out on £100’s or even £1,000’s in compensation you could be entitled to. Starting a claim only takes 5 minutes, so why not do it now?