Watchdog finds ‘systematic’ failings in pensions advice

ADVICE recommending that savers cash-in pensions was misleading in half of cases analysed by the City regulator, it has revealed.

The Financial Conduct Authority (FCA) is in the process of investigating pension transfers over fears that savers are being ripped off for bad advice.

Yesterday it said it was “very concerned” that financial advisers were not consistently providing suitable advice on pension transfers, finding that less than half of the advice it had reviewed was “suitable”.

Last year final-salary pension cashins peaked, with 100,000 people transferring money away from their defined-benefit pensions after receiving advice.

This year the number of recorded transfers has fallen for the first time. Savers with these arrangements have been allowed to swap their guaranteed lifetime income for a cash sum since 2016, however fears are mounting that this has opened up a new mis-selling scandal.

MPS on the influential work and pensions select committee warned that unscrupulous advisers were encouraging savers to transfer their money from guaranteed schemes into rip-off funds.

At four companies, which have now voluntarily stopped advising on pension transfers, the FCA said it found “systematic” failings that had led to the vast majority of customers being given potentially inappropriate advice.

The FCA said: “We will not hesitate to take action against any firm that continues to present harm to consumers.”