FSCS quotes SIPP cases in pension warning

The FSCS, the government-backed financial safety net scheme, has published a series of case studies to warn consumers about the potential risks of consolidating pensions into one plan. The FSCS said that pension savers can become victim to poor advice when consolidating pensions and can lose substantial amounts. Consolidating pensions is a legitimate regulated activity and a growing trend but some unscrupulous advisers have taken advantage of consumer ignorance. The process of consolidating pensions means combining several pensions into one and often transferring funds to a new pension. It is often the case that the consolidation advice involves transferring pots into a SIPP. The three cases quoted by the FSCS in its campaign all involve transfers into a SIPP. Case studies where victims were helped by the FSCS: • Gill, a 61 year old from Wiltshire received £41,682 in compensation from FSCS having been given unsuitable advice in 2015 to consolidate a number of private pensions she had built up over her career and put them into a Self Invested Personal Pension (SIPP). Having had lots of different jobs, starting work in the public sector, then working in consultancy and at one stage having her own company, consolidating her various pensions into a SIPP seemed to make sense, the FSCS said. She trusted her adviser and went ahead with the transfer. But when she turned 60 and was looking to retire, she found that her money had been invested in a number of unsuitable (often long term) investments such as car parks and overseas hotels and she would not be able to access it fully until she was 75. It had also reduced in value. • Karl Hayes, aged 66, from Peterborough lost almost £55,000 after transferring three pensions into a SIPP in 2013 but the FSCS were able to help him get all his money back when the adviser he used went out of business earlier this year. • And George Halliday, aged 67 from Midlothian in Scotland got £48,000 in compensation from the FSCS having been "badly advised" to transfer his final salary pension into a SIPP in 1992. The FSCS said: “Consolidating several pensions might seem like the obvious thing to do but every year FSCS hears from thousands of people who have lost their pension savings due to unsuitable advice.” The FSCS is telling consumers that if they have suffered loss due to poor consolidation advice from a failed firm it may be able to help. • Consumers who believe the have been wrongly advised to transfer pensions you can check if they can claim through the FSCS by visiting https://claims.fscs.org.uk/. They can also contact the Customer Services Team on 0800 678 1100 or 020 7741 4100, or by email at This email address is being protected from spambots. You need JavaScript enabled to view it. .

FSCS quotes SIPP cases in pension warning

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