Featured on BBC One’s Northern Justice & Morning Live



Increase in Defined Benefit Pension Transfer Complaints

As the number of complaints to the Financial Ombudsman Service increases and the number of decisions it upholds rises, financial advisers have an important role to play in mitigating risk for their clients.

Defined Benefit Pension Transfer comepensation

The Financial Ombudsman Service (FOS) is a government backed body that deals with complaints between regulated financial institutions and their customers. It has recently published its latest half-yearly complaints data, relating to the period July to December 2023. The overall number of complaints rose by almost 20% compared to the same period in 2022 (to 95,349), with an average of 36% of complaints being upheld (up from 34%). The increases were largely due to banking and consumer credit complaints, including fraud and scams, but there were also sharp increases in the number of complaints relating to car and motorcycle insurance. Other categories include mortgages, investments and pensions.

In a recent article, FT Adviser focused on the complaints data relating to Defined Benefit Pension transfers, quoting that FOS upheld 58% of claims in 2022/2023, compared to 52% the previous year and just 42% the year before that. The number of DB transfer complaints has also risen steadily in recent years.

Workplace pensions, such as those offered by public sector bodies (police, NHS, teachers, steelworkers, civil servants etc), often come with additional benefits, including a guaranteed ‘final salary’ or death benefits, depending on how long you have worked with the organisation. As such, they are considered solid pension schemes with generous employer contributions.
Since the introduction of pension freedoms in 2015, it has become easier to transfer and consolidate pension funds. Unfortunately, this also means that unscrupulous financial advisers have been cashing in on fees for arranging pension transfers that turn out to be unsuitable for the investor.

The Financial Conduct Authority (FCA), the government’s financial watchdog, believes that transferring out of a defined benefit scheme is generally not in a customer’s best interests. Any new pension fund would have to perform exceptionally well to offer the same benefits and cover the advice fees and platform charges incurred when switching.

Negligent pension transfer advice can lead to financial loss and be grounds for a Defined Benefit Pension Transfer claim. The FCA continues to monitor the financial advice sector to ensure that firms and individuals can demonstrate how their DB pension transfer advice service comes with the appropriate suitability checks and complaints handling.

A large number of pension transfer complaints arise when investors see the value of their pension pot fall or when they realise they no longer have the generous death benefits that had been in place to protect their family.

High fees and charges, unsuitable or high-risk funds, and loss of ‘defined benefits’ can all be factors in professional negligence claims. The British Steel Pension Scheme (BSPS) scandal is one of the country’s highest-profile cases involving flawed pension transfer advice, leading to many financial advisers going out of business, a raft of inquiries and reviews, a nationwide redress scheme and pension reforms. Of the advisers that remained, many chose to no longer offer DB transfer advice.

Even if you or a loved one transferred your pension years ago or the financial adviser is no longer trading, you may still be able to make a claim for compensation.

Sarah Spruce, Head of the Professional Negligence team at TLW Solicitors, says:

“I am not surprised at the increase in number of complaints. People in or planning for retirement are beginning to realise that their pensions aren’t what they thought they’d be. Until a detailed comparison is carried out against the pension that they would have had, many people don’t realise how much they have lost out by transferring their pension. These can be very complex cases, and accurately valuing them sometimes requires expert evidence.

If you are concerned about yours or a loved one’s pension, get in touch with a member of my specialist team for a no obligation discussion and we can explore whether your case is suitable for a ‘no win, no fee’ refund claim.”

Our team can review your case to see if you were given unsuitable pension transfer advice. We have many years of experience dealing with direct claims to financial services providers, as well as claims through the Financial Ombudsman Service and the Financial Services Compensation Scheme (FSCS), a lifeboat scheme that can provide compensation even if the financial firm that provided the advice has gone out of business. We will discuss the best option for you, and if we determine that your claim is suitable, we will handle your case on a no-win, no-fee basis.

If you, or one of your friends or loved ones, were not given the right advice about transferring out of a final salary (Defined Benefit) pension, please get in touch. You can call us on 0800 169 5925, email us or complete one of the forms below.

It is important to get in touch as soon as possible, as time limits can apply.

Minimum case values apply.

Meet Our Team

Meet Sarah, who heads up our experienced Pension Claims team.

Sarah and her colleagues are on hand to help with your claim.

TLW Solicitors pledge to:

  • Always fight your corner.
  • Explain anything you don't understand.
  • Provide full transparency on our charges.
  • Never ask for any upfront payment.
  • Recover the best compensation we can.
  • Keep your personal information safe.
  • Respond quickly to any queries.