Pension liberation complaints are set to soar as consumer watchdogs ready to reveal decisions about blocked cash transfers.
The Pension Ombudsman has a backlog of around 80 complaints about transfers from private and workplace pensions to suspected scam schemes that unlock funds for retirement savers.
The ombudsman is steeled for a rush of new complaints following the rulings.
The main trigger is expected to be retirement savers seeking compensation because providers should have blocked their cash transfers to rogue schemes.
Following these transfers, many retirement savers have lost their money or faced paying tax bills for taking their cash before the age of 55.
Capita Oak
Some have also paid fees of up to 33% of the value of their pension transfer.
One scheme under scrutiny is the Capita Oak Pension Scheme, which invests in self-storage facilities.
The ombudsman expects to publish a decision on a complaint about this scheme before the summer.
The issue related to a pension saver who switched cash to the scheme and then decided to rescind the transfer.
The ombudsman has already upheld the complaint that has seen £350,000 from a NHS Scotland scheme go to Capita Oak, which the firm has not transferred back at the consumer’s request.
The ombudsman has told the consumer to consider legal action to recover his money.
“The decision we publish is only binding on the parties involved, but will give other consumers who transferred money to Capita Oak the approach we are taking in our resolutions,” said a spokesman for the ombudsman.
“Hopefully this will help transferring schemes and consumers with deciding complaints.”
Hold on complaints
The ombudsman also appealed for consumers not to complain about similar issues until the result of the complaint is published.
“This will save time,” said the spokesman. “Any similar complaints will be parked until the first ruling is published and then probably referred back to the provider to review their decisions.”
As a result of this warning, the ombudsman is waiving time restrictions on pension liberation complaints for some retirement savers.
The time limit is generally three years from the transfer date unless any delay is reasonable.
“Complainants will also have had to give time to the company involved to resolve the problem under their formal complaints procedure before we can consider the case, so making a formal complaint now will also speed things up at a later stage,” said the spokesman.
