An Overview of Pensions
A pension is a form of investment or savings plan designed to provide you with an income to live on when you retire. There are many different types of pension arrangement available, from state pension schemes offering, limited financial support for your old age, to private pension plans giving you the freedom to build a larger fund for your retirement. Even if your initial contribution is small, whatever you can put aside in the early years will be vitally important to getting your pension growing to avoid a poor income in retirement.
Pension Claim Types:
Apart from FSAVC Pensions mis selling we commonly deal with two other types of pension claims:
- Pension Transfers to Personal Pensions
- Opt Out or Leaving Company Pensions
Personal Or Stakeholder Pensions – Regular Contributions
You may be paying, (or have previously paid) into a Personal Pension or Stakeholder Pension while still a member of the employer’s pension scheme. These type of pensions may have been unsuitable for you if you had the option to purchase added years or contribute NHS AVC and especially if you had no private earnings.
Example: An NHS doctor who was in the NHS pension and was persuaded to save into a private pension, (Personal or Stakeholder): If you had no private earnings in addition to the NHS income, then you would have been better advised to choose to top up the employer scheme.
Opt Out or Leave Company Pensions
An opt – out is where you could have been a member of an occupational pension, particularly a “defined benefit” or “final salary” scheme and you were sold a personal pension instead. Your personal pension would have not had the benefit of guarantees and/or the employers’ contribution. Such claims can be substantial.
How Do I Know If I was Mis-Advised On My Opt Out Pension?
- If you were a member of a company pension, and were advised to stop it and start a personal pension, then you most likely have a claim.
- If you moved jobs and were advised not to join the company scheme, then as a non-joiner, you most likely have a claim.
- Government employee? – including NHS, the police, teachers, local government employees and firms who ran final salary schemes such as Lloyds bank, M&S, Post Office etc at the time.
Pension Transfers To A Personal Pensions Or Stakeholder Pension
A personal pension is a way of saving for your retirement. It works like this:
- You make regular payments (contributions) into your pension fund. This is the pot of money you build up while working and use when you retire, to give you an income.
- You may receive tax relief on these regular payments.
- Your employer might make payments into your pension fund.
- The fund is invested, for example in stocks and shares, with the aim of increasing the amount in it over the years before you retire
- When you retire, you have a number of options on how to take the money in your pension pot.
How do I know If I was mis-advised on my Personal/Stakeholder Pension?
- Were you persuaded to “tidy up” past pensions from a previous employer? Below are some of the reasons you may have been mis-advised on your personal pension:
- You were advised to transfer your company pension or your occupational pension into a personal pension? You may have left the employment and were told that the pension was “frozen”.
- You may have left a company which had a pension, and moved to a firm with no pension, so when you started a personal one, were persuaded to move the frozen pension.
- Most important, were you given a written financial comparison (a pension transfer analysis) to show you the percentage growth needed for your personal pension to match their occupational scheme benefits?
- Did you understand that you may be giving up guaranteed benefits in your occupational pension for a riskier pension linked to the stock market?