Were you mis-advised to transfer your pension?
Why pension transfers are such a big deal
A pension is typically the second-largest asset most people will ever own, after their home. When someone advises you to move it — especially out of a defined benefit (DB) scheme into a personal or self-invested pension (SIPP) — they are advising you to give up guaranteed, inflation-linked income for life in exchange for a lump sum you then have to manage yourself.
For the vast majority of people, that trade is a bad deal. The FCA's longstanding starting assumption is that a DB transfer is not in the client's interest, and an adviser recommending one has to prove otherwise.
When does it become mis-selling?
Pension transfer advice is mis-selling if the adviser failed to meet the FCA's suitability rules. Common failures include:
- No meaningful attitude-to-risk assessment — treating cautious clients as balanced or adventurous.
- Ignoring guaranteed benefits — downplaying the value of a DB pension's indexation, spouse's pension, or early-retirement options.
- Recommending unsuitable destination funds — moving hard-earned retirement savings into illiquid, high-risk, or offshore investments.
- Conflict of interest — the adviser earned a large one-off fee from the transfer that they would not have earned by advising you to stay put.
- Pressure or urgency — suggesting you had to act quickly "before the rules change" or "while the transfer value is high".
The British Steel Pension Scheme (BSPS) scandal — where thousands of steelworkers were advised to transfer out of their DB scheme around 2017 — remains the landmark example. The FCA has since required firms to review past transfer advice and pay redress where it was unsuitable.
How much could you claim?
Redress for unsuitable pension transfer advice is calculated using the FCA's prescribed methodology (currently in PS22/13). The goal is to put you back in the financial position you would have been in if the advice had been suitable — typically as if you had stayed in the original scheme.
For many BSPS claimants the average redress was in the tens of thousands of pounds, with some cases exceeding £100,000.
The Financial Services Compensation Scheme (FSCS) can pay up to £85,000 per person per failed firm where the advising firm has gone out of business. Claims against firms still trading are handled directly, with the Financial Ombudsman Service as a free fallback.
What should you do?
Even if your pension transfer happened years ago, it may still be within the window for a complaint. The key starting points are:
- The paperwork from the time of the advice (suitability letter, transfer value analysis).
- The name of the adviser and the firm.
- What has happened to the money since.
You don't need all of this to start — a good review can work with limited information and reconstruct the rest.