Across the UK, we are being urged to pay into a variety of pension schemes. But unfortunately, many savers who have paid into Self-Invested Personal Pensions (SIPPs) have lost vast sums of money through under-performing and mis-sold schemes.
In recent years, a vast number of financial advisers have encouraged savers to invest in SIPPs, based on promises of high returns very quickly. Unfortunately, a large number of these savers have found their savings to be wasted on investments, such as holiday properties and green energy projects, which has resulted in many savers losing thousands of pounds.
As the number of people affected by the mis-selling of SIPPs continues to grow at an unprecedented rate, the government has announced a new fund of £120 million to provide mis-sold pension compensation. The wave of SIPP mis-selling is comparable to the PPI claims which swept the country a few years ago and, as investigations continue, an increasing number of cases are being brought to light.
The fund will be used to compensate those who were conned into investing in SIPPs and could see savers benefit to the tune of up to £50,000. The current limit will increase by next April to a maximum amount of £85,000, to mirror the growing number of people affected across the country. The compensation scheme is managed by The Financial Service Compensation Scheme. It is expected that the scandal will cost the Financial Services Industry around £10 billion, by the time investigations and compensation payments are complete.
The Financial Conduct Authority recently published the findings of their Financial Lives Survey, which estimated that one in eight savers believe they were mis-sold a financial product, such as a pension investment.
Have you been mis-sold a pension? There are still thousands of people who are not aware they have been mis-sold a SIPP, so it is essential that advice is sought to scrutinise pension investments as there is a time limit for compensation.
To find out more about mis-sold SIPPs and investments, please contact us or take a look at the latest news and goings-on in the pension world through our Pension Justice blog.