After many cases of mis-sold pensions, the UK financial services regulator is making efforts to prevent similar scandals in the future. Since this problem is mainly caused by individuals putting their retirement savings in the wrong place, there is a need to protect them from scammers looking to squander their money.
Amid the efforts to improve get claims advice, The Financial Conduct Authority came up with proposals which are aimed at protecting individuals who might fall prey to mis-sold pensions. According to observations and the reports received by the authority, individuals who made wrong investments were issued with false assurances that they would get high ROI. This was based on the savings and time they dedicated to serving various companies.
The proposal also suggested that the get claims advice professionals should inform their clients that having their money transferred out of DB pension is not a wise move. These are some of the significant causes of mis-sold pensions that have seen the country lose lots of money in the past few years.
In the past few years, there has been an increase in the number of persons claiming defined benefit pension hence making the total amount of money paid out to increase dramatically. Defined pension is a good idea since it assures someone a constant flow of income throughout their life. It is linked to an index and is calculated based on a person’s salary.
Can You Claim Mis-Sold Pension?
Once you have learned that you are a victim of mis-sold pension, the first thing you want to know is whether you can claim your money. After all, the best way to protect your future is by taking good care of your pension. But here is a case where it has been mis-sold, and your future seems to be pretty thwarted. Though the UK government has made an impressive move of putting aside £120m to compensate those who lost their money, there has to be a procedure which you can follow to get the money back. From the statement above, at least you know that you could make a claim.
According to the government, if you invested your pension the wrong way, and it is gone, you can be guaranteed a return of up to 20% each year. These are the funds that get lost after being put in get-rich-quick schemes like energy projects, airport parking, and holiday homes. The good news is that the government is giving you a second chance to secure your pension and make good use of it.
According to the FCA, one out of eight savers believes that their pension has been mis-sold and therefore, they are advised to make a claim as soon as they can increase the chances of getting a positive outcome.
For every claim presented, FCA has secured up to £50,000. However, it is expected that this figure will rise in the near future since the claims would also rise.
Currently, the average compensation for claims is sitting at around £5,000 for the private pensions, and up to £50,000 for final year pensions. According to experts, the figure for total compensation is expected to rise to £10bn.
The Final Thought
If you are working on your retirement life through savings, it is wise to use your money well. Putting up an investment plan is a good thing, but before you do, make sure that you carry out thorough research. Some sectors will give you high ROI, but this is not the case with most of them. Look for a reputable financial expert to guide you through the investment process to decrease the odds of having your pension being mis-sold.