After your home, a pension pot can often be the largest asset that you own. So, it’s important to make sure that your pension is protected and that you make the right decisions with it.
In recognition of this in 2015, the Government brought in a number of measures to help safeguard your pension. One such measure is to ensure that your pension manager or trustee confirms that you have taken the right advice before you transfer your pension into a different scheme. This can be of particular importance when you transfer from a lucrative final salary (Defined Benefit) pension into a product that can be a bit riskier, such as a SIPP.
The Pension Schemes Act 2015 came into force on 6 April 2015. The Act requires the trustees of Direct Benefit pension schemes to obtain prior written confirmation that the member (you) have taken independent financial advice from an authorised person before allowing the transfer of a pension. For reference, the relevant section of the Act is below:
48 Independent advice in respect of conversions and transfers: Great Britain
(8) In this section—
“appropriate independent advice” means advice that—
Taking advise on your transfer is critical and is instrumental in making sure that you make the right decision. Pensions are highly technical financial products that require expert knowledge and understanding to ensure you are protecting your asset and doing the right thing. In many cases, people who receive independent advicein regards to transfers are often advisedthat transferring is not the best option for them, and if they do so, they may lose money.
With the need to take advice being so important, your pension trustee must ensure that you have taken appropriate independent advice from a qualified professional. If they have failed to carry out that check, you transfer the pension, and it goes wrong, then, they maybe liable for your losses as they failed in their statutory duty to safeguard you.
If you or your client have lost money as a result of a pension transfer,then contact the MBM Commercial dispute resolution team at email@example.com or on 0131 226 8200 to speak to one of our team today. We will be more than happy to have an initial no-cost chat to discuss your case and see if we can help.