CALL TODAY - 0114 266 4216

Mis-Sold Defined Benefit Pension Transfer

“Final Salary Pensions represent another major mis-selling scandal that is already erupting. ”

Frank Field, former MP and Work and Pensions Committee Chairman

What is Defined Benefit Pension Transfer Mis-selling?

Defined Benefit transfer mis-selling is when your adviser advised you to move your pension into another pension, but it wasn’t suitable.

Defined benefit pensions are the best pensions around. They are also called final salary pensions, and give you a guaranteed increase in income for life at retirement age.

Other pensions go through good times and bad.  Most importantly, members of a defined benefit pension don’t have to worry about investment risk. Who wouldn’t want a no-risk retirement?

Successive governments and nearly all respected financial commentators describe the defined benefit pension as ‘the gold standard of pensions’.

Still, more than 50,000 savers have been taking their money out of a defined benefit pension scheme every year.

Thousands of people have been encouraged to transfer their defined benefit pensions. But then ended up with bad retirement outcomes and lost their pension guarantees because they transferred their pension.

One of the reasons is this: Crooked financial advisers and unregulated introducers looking for high fees and in some cases commissions.

In addition, defined benefit pensions have continued to rise in value over the years. This means the adviser gets more money if they convince the saver to transfer out of their pension.

Some crooked advisers often persuade savers to transfer their pension to a SIPP or overseas pension scheme. The pension is then invested in high-risk schemes such as property developments and green energy projects. Such investments nearly always fail.


At this point, you might be wondering what can you do if you are in this position.

If you have transferred out of your defined benefit pension scheme, and you’re unsure about the advice – we can help.  We can give you advice, and we’ll explain your options.

We are always happy to share our knowledge and let people know if they could be due compensation.


How much compensation will I get for a mis-sold defined benefit transfer?

If the financial firm involved with your case is still trading, the Financial Ombudsman Service may decide the claim.  The Financial Ombudsman Service’s maximum award is £375,000. If the firm is no longer trading, the Financial Services Compensation Scheme may settle the claim.  The Financial Services Compensation Scheme can award up to £85,000.


Mis-sold defined benefit pension transfer

Firstly, it is crucial to remember that the Financial Conduct Authority regulates all financial advisers.

Secondly, financial advisers need to act in their client’s best interests. In most defined benefit transfers, the FCA says this is not so.

You will probably be compensated for your mis-sold defined benefit pension transfer.  If you can answer yes to one or more of the following statements:

  • Now you know you would have been better off staying with your old pension plan
  • You were approached out of the blue by an unregulated person offering a free pension review
  • You didn’t know much about financial investments
  • Pension transfer fees were a surprise
  • The consequences of the pension transfer weren’t fully explained

We have helped many clients who have been encouraged by a financial adviser to transfer from a defined benefit pension. We find that almost always, it was not in the client’s best interest to do so.

If you transferred from a defined benefit pension scheme and have concerns about the advice provided by your financial adviser. Our claims team will be happy to investigate on your behalf.


Have you transferred from your public sector pension?

Nearly all public sector pensions have been hit by pension transfer mis-selling.

Pensions in the public sector were targeted specifically after a legislative change in 2015.  Pension members were left vulnerable to exploitation by pension transfer scammers and negligent financial advice.

Using tactics such as tempting cash incentives, tax free lump sums and the false assurances of “unlocking” pension pots early. All to persuade members to transfer from their public sector pension. Many members were made to believe that in transferring their pension they would be better off in retirement. It’s only in exceptional cases that a transfer into a private pension, like a SIPP would be a suitable option.

Defined Benefit Pension Popularity

We are currently experiencing a boom in defined benefit pension transfers. The Pension Regulator has said more than 200,000 pension transfers took place in 2018-19. This was double the previous year’s figures. They were worth a total of £34bn.

The Financial Conduct Authority says, despite their guidance, too many advisers still do not provide an acceptable standard advice. Especially when it comes to advisers providing defined benefit transfer advice. As a starting point, they say, advisers should consider that the consumer should be best served by staying in a defined benefit pension.

Defined Benefit Pension History

In 1994, the government directed the Personal Investment Authority to investigate all defined benefit transfers. Thousands received compensation for unsuitable advice.

Was your pension transfer has been made before 30 June 1994? If so and the PIA has overlooked it for review, it may still be possible to claim compensation. Please contact our claims team so we can investigate.

Important Information!

You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.

It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.