You are here: Home - Retirement - Retiring now - News -

Surge in final salary pension transfer complaints

0
Written by:
09/10/2019
Customer complaints about final salary pension transfers have soared by 44 per cent in a year, data shows.

The Financial Ombudsman Service (FOS) received 798 complaints during the 2018/19 financial year compared to 553 the previous year.

It upheld 39 per cent of cases in favour of the customer in 2018/19, up from 30 per cent, according to figures obtained by consultancy firm Duff & Phelps under a Freedom of Information request.

An estimated half a million people have cashed in their final salary or defined benefit (DB) pension in exchange for a lump sum transfer into a defined contribution (DC) arrangement since ‘pension freedom’ rules were introduced in 2015.

Such transfers have become a controversial topic because in most cases, they are not in the best interest of the saver as they involve people giving up a guaranteed pension income in retirement.

Anyone with a DB pension valued at £30,000 or above must take advice from a regulated financial adviser before they can transfer.

However, the Financial Conduct Authority (FCA) said earlier this year it was “deeply concerned” by the number of savers who are told by advisers to ditch their ‘gold plated’ final salary pensions.

The regulator said it plans to ban a controversial charging model – known as contingent charging – which means advisers only get paid for recommending a client transfers their pension.

Mark Turner, a managing director at Duff & Phelps, said: Since the introduction of pension freedoms, some 69 per cent of individuals were advised to transfer out of their DB pension, according to FCA data.

“The FCA is concerned that unsuitable transfer advice has been, and is still being, given.

“The FOI data reveals the FOS is upholding more cases in favour of the customer this year than last, which sends a clear message that the DB transfer market is very much under the eye of the regulator.”

For more, see: Five reasons to transfer your DB pension (and five not to)

 

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Which? contactless payments warning

Freezing your debit or credit card when it’s lost or stolen won’t necessarily stop all transactions going thro...
Which? contactless payments warning

Financial worries loom for retirees

A giant study has blown a hole in the clichéd image of retirement – and found people worry about money.
Financial worries loom for retirees

First-time buyers stung by 20 per cent Help to Buy premium

First-time buyers in Yorkshire, the West Midlands and the North West are being forced to pay a premium of more...
First-time buyers stung by 20 per cent Help to Buy premium

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week

Read previous post:
Communities cut off from cash

Widespread cuts to the UK’s ATM network are leaving thousands of people facing long journeys to make free cash withdrawals.

Close