Pension: Could you get up to £85,000? Britons warned to check on ‘compensation’ for advice

Pension saving is an important endeavour and many people will want to make the most out of their money to ensure a comfortable retirement. Whether this involves changing the management of one’s cash, putting more into a pension pot, or transferring out of a particular scheme, though, the matter can be complicated. As such, many Britons are urged to take advice when it comes to making important decisions about their pot.

Defined benefit schemes are commonly referred to as “gold-plated” pensions, as they offer a guaranteed income for retirement.

The amount a person receives is usually based on either their salary when retiring, or an average of earnings across a person’s career.

It is more challenging to find an example of a final salary pension currently, as many employers have stopped offering this option to their workers. 

Now, the FCA has written to 2,677 people who may have received this incorrect advice.

As the firms concerned have since gone bust, individuals affected are being urged to reach out to the Financial Services Compensation Scheme (FSCS).

The independent body is designed to provide both assistance and compensation to customers should a financial provider go under.

Under its rules, up to £85,000 can be paid out if the organisation finds poor advice has been given by an advisor that is now no longer trading.

The letter, as seen by the FT, has warned Britons to take action as they “could be owed money”.

Savers have a total of six years to lodge their complaint, meaning many may need to take action fast if they hope to receive compensation. 

But there is the potential that other individuals may have been affected, even if they did not receive a letter.

Data from the FCA showed that between April 2015 and September 2018, 235,000 defined benefit scheme members received advice about transfers.

Advice is a requirement when a defined benefit pension value exceeds £30,000.

As a result, many individuals may wish to go back over their records and check their circumstances.

Express.co.uk has contacted both the Financial Conduct Authority and the Financial Services Compensation Scheme for comment on the matter.