Those that have built up a retirement pot through an employer’s pension scheme are in a good starting position. But that is often not enough. Extra saving is usually required to live a good life, rather than just getting by. For employees, that extra saving could be done by paying more into the employer’s scheme, building up extra years of service, or it could be done through a private pension plan known as a Free-Standing Additional Voluntary Contribution Plan (or FSAVC for short). Many people were told these two options did the same job, but sadly that’s not the case.
Why FSAVCs failed to deliver?
FSAVCs were sold on the promise that increased control of the investment stategy would lead to higher returns compared to buying extra service in an employer’s pension scheme.
However, the very large charges levied on FSAVCs to pay for the administration, the fund management fees, the insurers profit and the salesman’s commission, left very little spare to deliver the investment returns promised.
Why FSAVC mis-selling happened?
In short, it was in the interests of the big insurers and banks and their financial advisers. The profits from steering people away from employer schemes were so large, it was almost inevitable the industry would recommend FSAVCs in the majority of instances throughout the 1990s.
How can you recognise the signs of mis-selling?
The same breaches of the regulatory selling rules crop up time and again in sales literature. Here are just a few of the common signs of mis-selling:
- Not being fairly advised of the pros and cons of all available options
- Being told an FSAVC was the only option
- Not having the investment risks explained fully
- Not being told about all the charges that would be levied on an FSAVC
What can you do if you suspect you were mis-sold an FSAVC?
It is never too late to get your retirement back on track (even if you are in retirement now). It is possible to prove mis-selling and be compensated accordingly. That compensation should be of an amount to put you back in the position you would have been in if you had taken the better option of paying extra into your employer’s pension scheme.
How to find out if you are owed compensation and how to claim it?
If you suspect you were a victim of FSAVC mis-selling, you are not alone and you must not feel it was your fault. Many people have challenged the advice they were given and been duly compensated. It’s crucial to seek advice and guidance to address the impact of mis-selling on your retirement savings. I set up Greg Vaughan Financial Services with the sole aim of helping people do just that. Please feel free to get in touch today for a free, no obligation, assessment of your FSAVC sale.