The Chartered Financial Advisers here at Heritage Wealth Solutions are saddened to hear that many people across the country, including here in Yorkshire, could find that their private pensions are riddled with errors.
Just recently news broke that Aviva, one of the UK’s leading pension providers, has revealed that millions of pensions taken out between the mid 70s and 2001 may have been miscalculated. The company has stated that such errors occurred due to their sales representatives failing to collect the relevant information that would allow them to come to an accurate conclusion on a person’s final sum in retirement, with a lot of confusion coming from ‘exit-fees’: a term in many old style pensions.
Exit fees were extremely popular in pensions taken out in the 70s, 80s and 90s and can be very difficult to untangle. Their initial aim was to allow insurance companies to recoup costs of commission paid to salesmen who sold their policy to an individual. It means that pension holders with such policies face no flexibility, struggles when making use of new pension freedoms and will pay a penalty to their insurer to access their pension. New pensions do not have the same issues, as in 2001 the government introduced stakeholder pensions, which drove down exit fee charges.
So what can you do if you feel like you are affected?
Our financial adviser team are specialists when it comes to retirement planning and pension plans, and so we are urging all of those people who have taken out a private pension before 2001 to speak to their provider and gather information and calculations. The older the pension scheme, the greater the chance that you may have been affected by this issue. You need to need to ask the following to ensure that your numbers add up:
– All of your records and go through them to check your calculations.
– Several valuations to guarantee that the figures are consistent.
– Provide information on any missing records you feel your provider doesn’t have to help make an accurate calculation.
Should you feel like you have been mis-sold then there may be grounds for the exit fee to be wavered.
If you are a Yorkshire resident based in the Leeds, York, Wakefield or surrounding areas and need expert financial advice then Heritage’s retirement planning staff are the ideal people for you to speak to.
Our team are all Chartered Financial Advisers and specialise in pensions, retirement planning and investments. For more information on these services or to enquire about our financial advice, please do not hesitate to call us on 0113 350 2080.