What Is a Pension Mortgage?
It is an interest-only mortgage that is supported by a personal pension. These were sold mainly in the 1980s and 1990s as a “cheaper” way to repay a mortgage by combining the cost of retirement planning and the mortgage into a single financial product.
Only 25% of the personal pension can be used to repay the mortgage or loan, the pension fund needed to be more than 4 times the amount of the mortgage to repay the mortgage in full.
Mis-Sold Pension Mortgages
If your adviser recommended a pension mortgage to you, it may have been unsuitable advice because:
- It is an investment-backed pension with a risk of a shortfall when you retire and are not in a position to do anything about it.
- All your eggs are placed in the same basket.
- Attaching the date of your mortgage repayment to the date of your retirement is inflexible and if there was a shortfall when you retired, you would have to find another means of repaying your mortgage at a time when money is short anyway.
- The mortgage would run for long in excess of the standard 25-year term which could increase your overall cost in terms of interest.
Even if the company that advised you to take out your mortgage is no longer in business, the Financial Services Compensation Scheme (FSCS) may cover you. This scheme was set up to provide compensation for customers of companies who cannot pay compensation.
What Can You Do To Reclaim Mis-Sold Pension Mortgages?
You can either, claim on your own or you can use a specialist like CMP to help. We can’t guarantee a pay-out for you or get more money than you would if you claim on your own, or that we can handle the claim faster.
What we can guarantee is a professional, straight forward, honest service which is hassle free for you. We will use our knowledge and specific expertise to ensure your claim has the best possible chance of being successful. For our contact details, click here and get in touch with us now.
Who Pays The Compensation?
Most of the cases we represent are presented to the Financial Services Compensation Scheme (FSCS) in a bid to reclaim money lost by investors who suffered negligent advice or were unaware of the full facts before making their investment.
The FSCS is a free service, therefore you can make a claim for compensation yourself.
The FSCS protects consumers when financial services firms fail or go bust. It’s the compensation scheme for customers of UK authorised financial services firms and is often referred to as the fund of last resort for individual investors.
FSCS protects the following:
- Deposits
- Investment business,
- Home finance (for business from 31 October 2004),
- Insurance policies, and
- Insurance broking for business from 14 January 2005. We also protect connected travel insurance where companies such as travel firms and holiday providers sell the policy alongside a holiday or other related travel for business from 1 January 2009
The FSCS has set compensation limits dependent on when the firm you are claiming against was declared as in default:
- Up to £85,000 for firms which failed after 1st April 2019
- Up to £50,000 for firms which failed between 1st January 2010 – 31st March 2019
- Up to £48,000 for firms which failed prior to 1st January 2010
What If The Firm Is Still Trading?
If the broker or your advisor is still trading any complaint must be made directly to the firm. There are regulatory procedures and timeframes the firm must adhere to when dealing with any complaint.
If you are unhappy with the final decision your complaint can be referred to the Financial Ombudsman Service (FOS).
If you are unsure whether you have valid reasons for a complaint to the firm call a specialist today and we will quickly establish if there is basis for a claim. For contact information please click here.