Complaints over dodgy pension transfers double

The number of savers making a claim against dodgy pension transfer advice doubled last year but Britons were still left £104m out of pocket.

The Financial Services Compensation Scheme, an industry-funded lifeboat, received 3,089 claims relating to pension transfers in 2021. Three quarters were successful and paid out an average of £59,400, totalling £133m.

The number of people seeking recompense was twice as high as in 2020, figures seen by Telegraph Money showed. Experts said claims would continue to rise this year.

Billions of pounds have been lost to poor pension transfers since rule changes in 2015 made it more lucrative for savers to forgo a gold-plated final salary pension in exchange for a cash lump sum. However, savers have repeatedly been given unsuitable advice or lured into overly risky investments with advisers profiting from high charges and backhanders from suspect investment firms.

Caroline Rainbird, of the FSCS, said: “This trend of rising claims will continue over 2022, with complex pension claims a major contributor to the £900m we will pay out next tax year.”

However, an £85,000 limit on compensation has left many out of pocket, with the average loss standing at £108,000, totalling £104m. Those making claims were typically near retirement age and have little to no time to recover the loss, the FSCS admitted.

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