Self-Invested Personal Pension (SIPP) - Scheme unsuitable given circumstances

A SIPP is basically a DIY pension – you choose how your savings are invested and have full control over them. With a SIPP, you have a much wider range of options available to you. However, with any investment comes risk – and you stand to lose money from your pension fund. There are also charges associated with SIPPs, and these may be particularly high if you choose to invest in property or other specialist investments.

If the recommended pension is potentially unsuitable in terms of meeting your needs, you may have been mis-sold the scheme. Anyone advising you regarding a pension should be consider your circumstances and be clear and up-front with you regarding any costs, charges and risks – if you suspect they weren’t, you should use Resolver to raise your issue with either the adviser or the organisation that sold you the scheme. If they are unable to resolve the issue to your satisfaction, you can escalate your case to the Financial Ombudsman.

Your rights

When you sign up to a scheme, you have the right to information about what you’ve signed up to – and you shouldn’t have to ask for it.

Your provider should tell you about:

• The basic details of the scheme
• The way the scheme works
• How you can leave the scheme
• The date the scheme will begin to pay out
• How much you’ll have to pay
• Exactly who is providing the scheme 

You should periodically receive a statement showing information about your contributions and the state of your pension.

You have the right to leave your scheme, and your provider should give you details of your rights and options when you choose to do so. They should do this within two months of you stopping your contributions. 

You can contribute to as many personal pension plans as you want to – provided you stay within the annual contribution limits. However, you can’t contribute to a workplace pension plan and a personal pension plan in the same year.

You will normally have the right to transfer your pension out of your previous scheme up until a year before you retire.

Who to complain to?

Depending on the nature of your complaint, your issue may need to go either the Financial Ombudsman or the Pensions Advisory Service and Pensions Ombudsman – it can get fairly complicated, but generally speaking the rules are as follows:

Complaints about personal (private) pensions and mis-sold schemes will go to the Financial Ombudsman. These include your SIPPS and Income Drawdown schemes etc. Complaints about workplace and government/state pensions go to the Pensions Advisory Service and Pensions Ombudsman.

Seems simple enough, but there's an exception. Any complaints about mismanagement or administration of a pension will go through the Pensions Advisory Service and Pensions Ombudsman – even if they're about a personal pension.

This can be confusing, but don't worry! The Financial Ombudsman and Pensions Advisory Service work together to direct your complaints to the right place. This means you'll be sure to get your issue heard, regardless of where it's sent.

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