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The FCA Issues Pension Warning Notice, But What Is It?

Money Savings Advice FCA Issues Pension warning

After working so hard to build up your pension pot, it’s scary to think that every penny could be lost overnight. Unfortunately, this is a very real consequence of pension scams and mis-sold pensions.

In 2018, the Financial Conduct Authority (FCA) found that the average sum of money lost in a pension scam was £82,000 – equivalent to over 20 years’ worth of savings. Nearly a quarter of these pension scam victims took less than 24 hours to agree to the offer they’d been made. Tens of thousands of pounds lost overnight.

Financial scams and mis-selling scandals involving pensions are rife across the UK. So much so that the number of mis-sold pension claims is doubling every two years. So what is the FCA doing about it? Read on to find out more about the FCA’s reaction to pension mis-selling, what FCA pension warning notices are and what they mean for you.

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The Problem With Pension Mis-Selling

A pension scam is an obvious form of pension mis-selling – malicious, cruel and undoubtedly a crime. But pension mis-selling doesn’t have to be as explicit as this.

Something as simple as an inexperienced financial advisor offering confusing or misguided advice when recommending you a pension plan also counts as mis-selling. While not as sinister as an out-and-out scam, it can be just as harmful if your hard-earned retirement fund is locked away in a high-risk investment.

Can I Claim Compensation for a Mis-Sold Pension?

Yes. The simple fact of the matter is that if you have been mis-sold a pension or mis-advised about a pension transfer, then you have every right to compensation. There are very strict regulations when it comes to financial mis-selling as we saw with the PPI mis-selling scandal.

One of the benefits when it comes to financial transactions such as pension advice is that very often there is a detailed paper trail. This ensures that any mis-advice given with regards to your pension should be relatively easy to identify.

The FCA and Pensions Advice

Pensions are likely to be the biggest financial asset many of us own. As such, making sure the pensions and retirement income sector is properly regulated is a key focus of the FCA.

Firms need special permission from the FCA to advise on pension transfers. If anyone doesn’t seem to be meeting the high standards set, the FCA has the authority to investigate them and take action to prevent any customers coming to harm.

In 2018, the FCA found that only 60% of financial advice given by firms about transferring workplace pensions into personal schemes was deemed to be ‘suitable’. So what does that mean for all those companies not playing by the rules?


Mis Sold Pension compensation pay-outs where £40m in 2018 and likely to grow substantially over the next decade according to the FSCS.

Pension fraud costs pension schemes £6bn per year.

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FCA Warning Notices for Financial Firms

If a firm is found to be putting peoples’ pensions at serious risk, it’s likely they’ll be issued with a warning notice from the FCA.

There are a few situations in which this might happen:

  • The firm is providing pension advice that has a high risk of being ‘unsuitable’
  • There are obvious flaws in the advice process that the firm has missed
  • The firm’s processes and procedures are not being internally reviewed adequately

The next steps depend on the decision made by the FCA’s Regulatory Decisions Committee. Fines can be issued, criminals charged and a firm’s FCA authorisation can be revoked, meaning they are no longer able to provide FCA regulated services such as pension advice.

Will You Be Told if Your Provider Is Sent an FCA Warning Notice?

In short, no. As a customer, you won’t be told if your pension provider or financial advisor is sent a warning notice from the FCA. You can, however, find enforcement actions on the FCA’s website with the details of all actions taken against a company.

This means that it is on you as someone with a pension to keep it out of the wrong hands. When it comes to pension scams or mis-selling, prevention is a lot easier than a cure.

FCA Warnings for Pension Holders

The FCA has various recommendations and resources to help you protect your pension pot. Knowing how to protect yourself from a pension scam or mis-selling is a good place to start.

Avoid Dealing With Anyone on the FCA’s Warning List

The FCA’s Warning List is a tool to help you spot whether an investment opportunity is actually a scam. This is a list of firms or individuals known to be operating without FCA authorisation. If you deal with someone unauthorised by the FCA, your money is at risk.

Check Whoever You’re Dealing With Is Who They Say They Are

Just because a firm doesn’t show up on the FCA’s Warning List doesn’t automatically mean they aren’t scammers. Check the FCA’s Financial Services Register to make sure they’re authorised first and are allowed to provide you with the service they have promised you. Also double-check the contact details the FCA holds on the firm you’re using – this can stop you getting in touch with a ‘clone firm’ who are scammers pretending to be someone else.



Know What to Look Out For With Pension Mis-Selling

If you think you’ve been mis-sold your pension plan, you could be owed compensation. Some common signs of pension mis-selling include:

  • Not being given clear, impartial, easy to understand information by an advisor
  • Not being given advice that is individual to you and your circumstances
  • Not being informed of all the risks involved with your new pension plan
  • Not having all the terms, conditions, charges or exclusions explained to you fully
  • Feeling pushed towards or pressured into making a certain decision

If any of these sound familiar, you can make a complaint to the pension provider or contact the FSCS or Financial Ombudsman Service for further support. You may also want to seek legal advice as to the best way to make your claim for compensation.

Know How to Spot a Pension Scam

As a pension pot is likely to be the largest financial many of us have, they’re also a prime target for scammers to go after. Knowing what to look out for in a pension scam can help keep your money safe. Watch out for:

  • Being contacted out of the blue by someone you don’t recognise
  • Being offered ‘free advice’ or a ‘free pension review.’
  • Being offered lucrative, high returns (over 8%) on exotic or overseas investments
  • Being offered access to your pension before you turn 55 (pension liberation)
  • Being rushed into making a decision or pension transfer quickly

The golden rule of pension scams: If it seems too good to be true, it probably is. Approach these opportunities with caution and suspicion and always report the scam to the FCA using ScamSmart and Action Fraud if you’ve been affected.

How Do I Pursue Compensation for Pension Mis-Selling?

It is very important to remember that in order to claim compensation, first of all, you need to prove negligence. As a consequence, you will need to provide evidence to show there was misinformation/mis-advice given regarding your pension.

This could include:-

  • Written evidence of misleading or inappropriate advice given
  • Failure to appreciate your overall financial situation
  • Evidence that adviser was inexperienced
  • Failure to consider alternative options
  • The pressure to sign waivers
  • Failure to carry out a robust know your client exercise
  • Simple misunderstandings which should have been avoided
  • A pattern of inappropriate advice in the past

In reality, no two cases are ever the same and may involve different elements of evidence. However, the above list gives you an idea of what information will be required whether you pursue via the financial ombudsman or your own personal injury claims adviser.


Number of Complaints Submitted to the Financial Ombudsman Regarding Pension Products

This statistic illustrates the number of complaints submitted to the Financial Ombudsman regarding pension products and services in the UK between the financial years of 2009/2010 to 2019/2020. It can be seen that there were over 5.5 thousand new complaints regarding pensions in 2019/2020. This marked a significant decrease from 2018/2019, when under 7.5 thousand new pension-related complaints were filed. The smallest number of complaints were found in 2010/2011, when a total of more than 2.7 thousand complaints were recorded.


Do I Need a Claims Management Adviser to Pursue Pension Mis-Selling Compensation?

While there are formal ways in which you can pursue compensation yourself, this can be something of a legal and technical minefield. As a consequence, many people look to employ the services of a claims management adviser to help secure the maximum amount of compensation possible. If, after reviewing your evidence, a claims management adviser believes you have a minimum 60% chance of success, they will likely offer likely you a “no win no fee” arrangement.

This will indemnify you from costs incurred by the adviser when pursuing your claim. However, in exchange, they will look to negotiate a “success fee” which is traditionally around 25% of any compensation awarded.

Is It Really Worth Pursuing Pension Mis-Selling Compensation?

Unfortunately, we can only estimate how many perfectly valid pension mis-selling compensation claims which have fallen by the wayside due to a lack of advice and information. It is important to remember that mis-selling with regards to pension transfers and pension contributions can have a huge impact on your final pension pot.

This is the money which will see you through your retirement years, and it is important that you protect your funds and maximise the long-term gains. Even if you have “agreed” to certain actions which turned out to be incorrect, this was done under the advice of a qualified practitioner. Just because you have “agreed” does not remove any element of their duty of care to customers.

Also, unless negligent third parties are held to account, then the mis-selling of pensions will continue into the future, and there will be many more victims. It is only the threat/consequences of paying out compensation which will force many financial advisers to adjust their procedures, improve their training and avoid similar incidents going forward.


Money Savings Advice Tip

If you think you could been the victim of pension fraud then you could make a compelling claim for compensation. Thousands of people throughout the UK are making compensation claims every week, our advice is to speak to a mis-sold pension specialist.


Quick Mis-Sold Pension FAQs


Many UK pension customers have lost money after investing in burial plot schemes. Compensation claims can be made, but they aren’t straight forward – it will depend on the initial advice you were given and whether it can be argued it was bad advice.

One of the most prominent cases of mis-sold pension investments for UK customers in the last few years is that of The Resort Group. This offered customers the chance to invest in a holiday property in Cape Verde – primarily the Llana Beach Hotel and the Dunas Beach Resort. The promised potential returns were outstanding – up to 10% a year. But this should’ve simply served as a red flag.

The Germany Property Group is an unregulated property investment scheme. That means that it’s a scheme you can choose to invest your pension fund in but, as it is unregulated, you are doing so at your own risk.

A SIPP is a Self-Invested Personal Pension. As with all pensions, there is some potential for SIPP products to be mis-sold. Victims of SIPP pension scams can report them and claim compensation.

If you’ve received bad pension advice, you could be entitled to compensation of up to £85,000. You’ll claim this from the Financial Services Compensation Scheme if you’re eligible. You’ll need to make a claim for bad pension advice you’ve received.

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How Can Money Savings Advice Help You With Making a Mis-Sold Pension Claim?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Financial Claims management companies. They have already helped thousands of people claim compensation for a mis-sold pension and they can do the same for you.

Choosing an independent claims management company means they won’t proceed with a claim unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these claim management companies who can help you make a compensation claim, then click on the below and answer the very simple questions.

Laura Broad

Laura is a professional content writer and learning designer, passionate about empowering people through straightforward, jargon-free content. When she's not reading or writing about all things personal finance, you can find her in the gym, barbell in hand.

Laura Broad

Laura is a professional content writer and learning designer, passionate about empowering people through straightforward, jargon-free content. When she's not reading or writing about all things personal finance, you can find her in the gym, barbell in hand.

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