Understanding Pension Compensation

Mis-sold pension — this is a malady that struck the British workforce back in the late ’80s. So many individuals were cheated out of their option for a more comfortable retirement when they heeded bad financial advice. It was a newspaper headliner, a veritable scandal, the impact of which is still affecting many lives today decades after it all went down.

The whole mess began with the advice given to a good portion of the UK’s working population to transfer away from a company pension scheme. The fact that there are hundreds of thousands who have already been awarded pension compensation and yet many are still waiting to claim theirs gives you a better sense of the magnitude of the problem.

Those who transferred their final salary pension as a rule receive a larger amount since they’ve lost certain guarantees. Compensation for this case dictates that the person regain the financial position he or she would have been in if the transfer hadn’t been done. Some people receive as muchas £167,000 or even higher. Experts advise those in a similar situation to go through the trouble of getting their pension arrangements audited to see if they’re eligible for a lump sum payment.

Regardless of whether they are still working or already retired, people can file pension complaints. In fact, those who are already receiving pension can actually still be compensated, so it definitely behoves anybody who engaged in pension transfers and mis-sold pensions to confirm their chances for compensation. Any additional income, after all, is always welcome, and the amount may just be the ticket to a more comfortable retirement lifestyle.

Compensation is granted in different ways. Those already retired may get theirs in the form of a tax-free lump sum or through their pension fund. Those still working may get theirs 25% tax-free. Meanwhile, special cases involving employed individuals within a final salary pension scheme who were sold FSAVCs while still members of this scheme can get their compensation through the FSAVC pension or through a lump sum.

These days, the rules about pension selling are much stricter, thanks to the painful lesson from decades ago. On the other hand, so-called experts will continue to dole out poor money advice that would sink those who heed it in financial holes, so it’s important to use good judgment when making crucial decisions about your assets. Find legitimate financial advisers when looking to optimize your earnings. And if you think you’re eligible for compensation, confirm it by getting your pension arrangements audited post-haste.

About the author:
Sarah Miller is a business consultant who loves to write informative articles regarding various business industries. In fact, she writes in behalf of http://www.pensioncompensation.net/faq/4574521183

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