Couple complain over investment advice given to supplement income for retirement

Investments Up to £5,000 Distress and inconvenience

Andrew and Yvonne contacted us after being given advice to re-mortgage their home and invest in a high risk unregulated collective investment scheme. But we didn't think the advice was suitable, and caused the couple a lot of unneeded financial stress and problems, so told their provider to pay compensation. 

What happened

Andrew and Yvonne were retired and had paid off their mortgage. They were looking to invest in order to receive an income to supplement their pension. They wanted more disposable income to help them enjoy their retirement and to help pay medical bills for existing conditions. 

The business recommended they re-mortgage their home and invest this money in a high risk unregulated collective investment scheme. The business said this investment would regularly pay out enough to cover their mortgage payments and also provide additional income they could use.

However, within a year, the investment had stopped paying any income, leaving Andrew and Yvonne struggling to meet their mortgage repayments and medical bills. They continued to struggle for almost two years up to the point their mortgage provider started repossession proceedings.

Andrew and Yvonne were devastated by what had happened and complained to the business that the advice they’d received wasn’t suitable, and that they were both suffering from stress with the worry of losing their home. They provided medical evidence to show Andrew had a breakdown as his health worsened. He’d previously been receiving treatment privately for a long-term condition but had stopped this once he could no longer afford payments. He was still waiting for treatment, but in the meantime described being in intermittent pain for several months. Yvonne had started to work again as she was so worried about not having enough money to pay her mortgage. This was very upsetting as she was expecting to enjoy her retirement and have a slower pace of life – but instead had started working again. 

What we said

We didn’t think the investment recommended for Andrew and Yvonne was suitable for their circumstances and we didn’t think they should have been advised to re-mortgage in the first place. We asked the business to put Andrew and Yvonne back in the position they would’ve been in had they not been sold the investment, including unwinding the mortgage as if it had never existed.

They’d experienced extreme distress over the year, going from a position where they owned their property outright and lived comfortably, to a place where they feared they’d lose their home. This distress was also compounded by the worry they had around not being able to afford their medical bills. Andrew also experienced pain and suffering as his health deteriorated as a result of the unsuitable investment advice – and this was supported by the medical evidence. The business had also known about the medical conditions when it provided the initial advice. 

We were persuaded that the business’s mistake had had an extremely serious impact on Andrew and Yvonne’s daily life and wellbeing over several years – and that there would be an ongoing impact to Andrew’s health for some time to come. All in all, the whole episode had an extreme impact on all aspects of their lives over a very long period. So we decided £4,000 was fair compensation for Andrew and Yvonne in the circumstances.