Complaints about pensions have soared by 24% in a year, says the Financial Ombudsman.
The independent adjudicator highlighted poor advice is putting some people’s lifetime savings at risk.
Unsuitable recommendations from financial advisers are leading savers to take risks with their money or to make transfers to funds that turn out to be scams.
“Last year, we highlighted the importance of people getting good advice before making critical decisions over their finances, for example when planning for their retirement,” said chief ombudsman Caroline Wayman.
“Since pension freedoms were introduced in 2015, people have had greater flexibility. But if they don’t get suitable advice, their plans could be at risk.
Pension freedom transfers go wrong
“This year, we’ve continued to see complaints involving pension freedoms where people have transferred out of defined-benefit occupational schemes to defined-contribution schemes. About three in 10 of these focus on the suitability of advice, and the rest relate to administrative issues, such as delays – where people believe they’ve missed out on a higher transfer value because a deadline expired.
“People have also complained about paying to be advised not to transfer – but often this is likely to have been good advice.”
The ombudsman received 388,392 complaints ranging from issues about banking and credit (39%), insurance excluding PPI (11%), investments and pensions (4%) and PPI insurance (46%). An average 28% of PPI complaints were upheld, while the rate rose to 38% for other complaints.
40 new SIPP complaints every week
Investors and savers made 15, 606 complaints about pensions, derivatives and other financial products.
Complaints about SIPP pensions are continuing to grow – hitting a level of around 40 new cases a week.
“This year we also saw increases in complaints about SIPPs both about the advice to get one in the first place and about the SIPP operators, on the basis that they had failed to carry out due diligence either before accepting business from an introducer, or before accepting investments into a customer’s SIPP. We’ll continue to look at complaints on a case-by-case basis,” said the report.
SIPPS were the most complained about aspect of taking advice from an IFA with 62% of cases resolved.