The mis-sold pensions are investments that are done in a pension scheme which is a risky place to invest. It involves taking out money from a safe investment and is put into an unregulated alternative where the return might be risky. Such pension schemes are marketed with promises of high returns and comfortable retirement. The result of such investments can be a financial loss for one rather than a benefit. The mis-sold pension is of different types that are:
Self-invested personal pension
This is commonly called SIPP which can be a good investment for one until the investment is not done in highly risky or under-performing investments. Such investments have high yearly charges and become a burden on one as they are even difficult to sell.
Occupational pension scheme
This kind of pension scheme is provided by the employer by opening up an account to save money that can be used after retirement. There are three different categories of OPS and they are regulated in most cases. If the OPS are unregulated then the investor has the right to claim for mis-sold pension.
Final salary transfers
Under this scheme, the employer suggests the employee move a specific amount to the pension scheme. The employer decided this based on the final salary that one has received and the last salary that he received. This can be risky as one is transferring the final salary pension from the pot and can lose them for once and all. If the employer has given him the wrong advice then one is eligible for compensation for the mis-sold pension.
Such pension schemes are unregulated and hold highly risky investments that are illiquid. One usually invests in such schemes only to stay away from guarding regulations. To claim for the mis-sold pension one has to prove that the financial advisor misguided you to invest in it. In this way, only one can claim compensation.
Different pension plans are up in the market for selling purposes. One always needs to plan for the future so that he can live without any problem even after retirement. Also, one has to plan for his family so that they can enjoy their life as well. Everyone wants to retire with some extra cash in his hands. There are a lot of things that one cannot do when he is working and earning and leaves for his retirement such as going on vacations. For doing such things one needs money.
To have this advantage individuals start planning for their retirement in advance. They opt for different policies and pay their installments out of salary. Some companies sell mis-sold pension plans that can take away the hard-earned money of a person. Such companies prefer sales over customer satisfaction and hence become a case of mis-sold pension. The mis-sold pension takes place when the company has not explained the repercussions of the plan in advance. One can only claim for mis-sold pensions only if they can prove that they were under the dark when the deal happened.