On the go: Since the introduction of the pension freedoms in 2015, the Financial Ombudsman Service has received fewer than 15,000 complaints involving pensions. Of this figure, just 1,700 have been about pension freedoms and around 300 of these complaints were about defined benefit transfers.
Less than 2 per cent of the pension complaints the ombudsman service sees involve DB transfers.
Yet between £20bn-£30bn is transferred out of DB pension schemes every year, so the sums involved can be considerable, and workers including those from the former British Steel Pension Scheme have been vulnerable to scams.
Caroline Wayman, chief ombudsman and chief executive of the Financial Ombudsman Service, said: “Most financial advisers I meet – and indeed most financial advisers – haven’t ever had a complaint. As long as advisers continue to treat their customers fairly, it’s likely to stay that way.”
Edwin Schooling Latter, the Financial Conduct Authority’s acting markets and wholesale policy director, said: “We have maintained our general advice to presume that transfers are not in the best interest of consumers. While transfers will be suitable for some, there is a risk of considerable consumer detriment in this area. We have therefore increasingly focused our attention on making sure that people who are considering transferring their money out of a DB pension pot get the right advice.”
Steve Webb, director of policy at Royal London, said: “As old-style DB pensions become rarer in the private sector, individuals increasingly have to take more responsibility for their own retirement planning and face greater uncertainty about the future.”
He said they may also be more vulnerable to ever-inventive pension scammers, adding: “The constant tinkering with the tax relief regime does little to help stabilise the system.”
Since April 2015, and the start of the pension freedoms, the FOS has received a total of 14,912 pension complaints. In 2015-16 there were 4,495 complaints, of which 32 per cent were upheld.
In 2016-17, there were 5,160 complaints, of which 33 per cent were upheld, and in 2017-18 there were 5,257 complaints, 31 per cent of which were upheld.
Below is a breakdown of the DB/pension freedom complaints the FOS has received since April 2015 to the end of September 2018.
Source: FOS
