Up to £50,000 compensation for mis-sold pensions

If you believe you were mis-sold a pension then you could be in line for up to £50,000 compensation from the government.

It is believed hundreds of thousands of hard-working Brits may have been conned into investing their pension savings in dodgy self-invested pension plans (SIPPs).

£120 million

Now the country’s financial regulator – the Financial Conduct Authority (FCA) – is urging anyone who thinks they may have been mis-sold to make a claim for compensation from a £120 million fund being administered by the Financial Services Compensation Scheme (FSCS).

Potential claimants are being told to act as soon as possible because time limits might apply to their case.

Underestimated

A 2017 FCA report called the Financial Lives Survey said the government may have underestimated the scale of mis-selling, but the Works & Pensions Committee have demanded tighter safeguards to protect savers from predatory financial advisors.

Labour MP Frank Field, chairman of the committee, said: “I am concerned about the role of SIPPs as platforms that help funnel unwitting clients’ pension savings into dodgy and inappropriate investments. SIPPs are happy to skim off their fee on the way, but there are serious questions about their commitment to due diligence and consumer protection.

A victim’s money

“When an unscrupulous financial adviser channels a victim’s money through a SIPP into an investment that then collapses, it is not enough for the SIPP provider to shrug their shoulders and say ‘caveat emptor’ (buyer beware).

“I will be writing to the FCA to ask what they are doing to ensure SIPPS are not acting as handmaidens to the pension-snatchers.”

Billions

Experts say the level of mis-selling and the sums involved are growing at ‘an unprecedented rate’ and the final figure will run into billions as the number of victims escalates.

The maximum level of compensation is currently £50,000, but that figure is set to rise by 75% to £85,000 in a year’s time.

However, the Financial Ombudsman Service (FOS) is allowed to raise its compensation level and can award up to an extra £150,000 for many cases.

Check

The experts believe there are still tens of thousands of people who don’t realise they have been mis-sold and urge people to check their investments.

A number of SIPP scams have been reported where unscrupulous financial advisors promised their clients returns of up to 20% a year if they invest their savings in ‘get rich quick’ schemes like airport parking, holiday properties and green energy projects.