John contacted us as he believed that he was given unsuitable advice to transfer his British Steel Pension Scheme (BSPS) into a Self-Invested Personal Pension (SIPP). When John received this advice in 2017 the transfer value of his pension was over £350,000.
What happened
The firm who gave John the advice completed a fact-find noting that his retirement planning was very important to him. The firm also said that John was looking to retire at age 55 but that his current scheme's normal retirement age and therefore the earliest he could take benefits with no penalties was 65.
The fact-find also said John had lost confidence in his British Steel scheme and was fearful of it falling into the Pension Protection Fund (PPF). It also said that John wanted control and flexibility over his retirement funds so that if he wished to retire from British Steel and take employment elsewhere, even part time, his pension could accommodate this.
John also completed an attitude to risk questionnaire and was recorded as having a cautious attitude to risk.
What we said
We found that his BSPS pension made up the majority of his retirement provision and so John needed to take no additional risk with his pension.
We took into consideration John’s worries about his pension falling into the PPF but the FCA has made it clear this is not a sufficient enough reason for an adviser to transfer a workplace pension. Nor, is wishing to access tax-free cash. Having weighed up the facts of what had happened we upheld John’s complaint and said the advice he had received to transfer out of his British Steel pension scheme had been unsuitable.
We recommended that the business put John as far as possible, back into the position he would have been in had he not received the unsuitable advice to transfer. This meant asking the business to calculate the compensation and, if possible, paying that back into John’s pension plan. If this could not happen, then it should be paid directly to John as a lump sum, after the relevant tax deductions have been made.