A mis sold SIPP is one of the most common types of mis sold pensions, being very popular but generally not suited for anyone without solid investment experience.
Your financial advisor shouldn’t encourage you to invest in a SIPP if you are unfamiliar with investing.
Other signs you may have a mis sold SIPP include:
- Your financial advisor telling you a SIPP is better than another personal pension
- Your financial advisor promoting a SIPP using only the tax benefits it provides rather than a pension’s benefits
- Your financial advisor failing to inform you of all the risks associated with a SIPP
- Your financial advisor failing to inform you that HMRC can change the tax rules at any time, potentially decreasing your return on investment
If you’ve invested in a SIPP, especially with funds from another pension, and were not given the correct advice, then you may have been mis-sold the SIPP and can therefore make a SIPP compensation claim.
A defined benefit plan
A defined benefit pension, also known as final salary, is when you transfer your pension in exchange for a cash value. You then invest this cash value into a defined contribution scheme. These include personal pensions, stakeholder pensions, another employee pension scheme, and SIPPs.
As with any pension transfers, advisors should make you aware of any risks and costs involved in the transfer and usually shouldn’t encourage you to transfer your pension without a very good reason. Many of the same signs of a mis sold SIPP apply to a defined benefit plan.
If you have experienced any of these then you may have been offered a mis sold pension transfer and be eligible for a claim similar to SIPP compensation.