People with final salary schemes who are looking to cash in their pension are finding it difficult to get help from financial advisers. IFAs won’t work with them because they are afraid of potential compensation claims in the future. There are millions of UK savers with final salary schemes, and they have the right to move their pension into other kinds of pensions. But if their pension is worth over £30,000 they must seek financial advice before moving it.
The Telegraph reports –
“However, savers are finding that firms are wary of advising them if they suspect they will not be able to recommend a move. At the same time, the path is blocked by personal pension providers that will refuse to accept a transfer from a final salary scheme without a “positive recommendation”…The industry calls people who want to move their pension against the wishes of an adviser “insistent clients”. Advisers say they won’t help this group quit final salary pensions when they don’t think it’s the right thing to do…Many cite the “pension review” of the Eighties and Nineties, which led to billions of pounds being paid in compensation after advisers were judged to have wrongly recommended people to give up company schemes for personal pensions.”