Personal Pension  

Fos ‘surprised’ by scale of pension freedom complaints

Fos ‘surprised’ by scale of pension freedom complaints

Caroline Wayman has said she is surprised there have not been more pension complaints since the inception of the at-retirement freedoms.

Speaking to FTAdviser, the Financial Ombudsman Service’s chief ombudsman said on the whole the number of pension complaints are quite stable, increasing by just 5 per cent in the last year.

Last month, the latest Fos figures showed the number of complaints the ombudsman has to consider rose during 2015 to 2016, but advisers still only accounted for just one in 100 cases.

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The annual review revealed that during the year there were a total of 340,899 new complaints about financial services products that required more detailed investigation, compared with 329,509 in 2014 to 2015.

Ms Wayman said: “It is inevitable that personal pension complaints have increased, as there has been such a focus, understandably, on the new pension freedom legislation.

“But considering the huge amount of publicity around the pension freedoms, it is more surprising there hasn’t been even more interest,” she stated.

“This shows that the industry has, in the main, adapted their systems well in the short time they’ve had to prepare for the freedoms.”

Around half of the pension complaints received were about delays and administration issues, explained Ms Wayman, which were broadly the same issues the Fos has always seen raised about pensions.

She said this included the small number of complaints received from people trying to access their pensions via last year’s reforms, while the rest came down to the appropriateness of the advice in individual circumstances.

Fears have been mounting that pension freedoms could result in a greater amount of pension scams.

Ms Wayman said over the year they had only received around 450 complaints related to phishing and other similar scams.

But she added she thought this number of scams being complained about was “only the tip of the iceberg”.

“Some people simply aren’t bringing complaints to us because there’s a stigma attached to being scammed - people feel embarrassed.

“We’ve seen some very sophisticated scams where anyone, no matter what your background is, you could be a victim.”

Back in March the Citizens Advice Bureau found common pension scam warning signs are missed by nearly 90 per cent of people.

Scammers’ tactics are also shifting, the Citizens Advice Bureau found, as they move away from pushing pension liberation schemes offering high rewards, towards other tricks such as ‘free’ pension reviews and ‘advice’.

The CAB’s online poll of 2,006 adults between the 19 and 21 February this year revealed people are particularly at risk of scams from phone calls, post and emails.