Claim Against a Pension Adviser — SIPP and DB Transfer Mis-selling

Pension advisers have among the highest duties of care in financial services. Advice to transfer out of a defined benefit pension or into a high-risk SIPP carries the potential for catastrophic, irreversible loss. If your pension adviser got it wrong, you may be entitled to significant compensation.

Quick Answer: Poor pension advice — particularly DB transfers and SIPP switches into high-risk assets — is one of the largest categories of UK mis-selling. The FCA found only 48% of the DB transfer advice it reviewed was suitable. Claims run via the FOS (up to £455,000) or the FSCS (£85,000) if the firm has failed. Source: FCA review of pension transfer advice (2018); Financial Ombudsman award limits 2026.

What a Pension Adviser Must Do

Under FCA COBS 9 and the Pension Transfer Specialist rules, any adviser recommending a pension transfer must:

Conduct a full Transfer Value Analysis (TVA) using the FCA's prescribed methodology
Assess your attitude to risk, capacity for loss and retirement income needs
Compare the guaranteed income you are giving up against realistic projected returns from the alternative
Obtain a Transfer Value Comparator (TVC) for defined benefit transfers
Give a clear, written recommendation — the default should be to stay in the DB scheme unless transfer is clearly in your interest

Key stat: the FCA's review of defined benefit transfer advice given from April 2015 found only 48% of recommendations were suitable; 29% were unsuitable.

How DB Transfer Redress Is Calculated (FCA PS22/13)

PS22/13 is the FCA's methodology for calculating redress where defined benefit pension transfer advice did not meet its rules. It works out what it would cost to put you back in the position you would have been in had you stayed in your DB scheme.

It is not a scheme that obliges every adviser to contact past clients. The only mandatory FCA redress scheme for DB transfers covers former British Steel Pension Scheme members advised between 26 May 2016 and 29 March 2018 (PS22/14). Everyone else needs to complain to the firm, then the Financial Ombudsman — or claim from the FSCS if the firm has failed.

SIPP Mis-selling by Pension Advisers

Many pension advisers recommended transferring client pensions into SIPPs holding unregulated investments — care home rooms, storage pods, overseas property or loan notes. The FCA's "gatekeeper" principle (confirmed in the Berkeley Burke FOS determination, 2018) means the SIPP operator may also bear liability, in addition to the advising firm.

Named Pension Advisers and SIPP Operators in Default

Rowanmoor Personal Pensions — FSCS default December 2023, £124m potential liability
Hartley Pensions — FSCS default February 2024
Berkeley Burke — FSCS default April 2020, £58m paid

See our full failed firms list.

Time Limits

6 years from when advice was given, OR 3 years from when you discovered the problem. Former British Steel members covered by the FCA's redress scheme may have had their advice reviewed regardless. See our time limits guide.

Frequently Asked Questions

Can I claim against a pension adviser who recommended a DB transfer over 6 years ago?

Possibly yes. If you only recently discovered the transfer was unsuitable — for example, after receiving an FSCS letter or a new pension review — the 3-year date-of-knowledge rule under Section 14A of the Limitation Act 1980 may apply. If you were a British Steel Pension Scheme member advised to transfer between 26 May 2016 and 29 March 2018, the FCA's BSPS redress scheme (PS22/14) required the firm that advised you to review that advice.

My pension adviser has retired. Can I still claim?

The adviser's firm may still be liable, and their professional indemnity insurance may cover the claim even after the adviser retires. If the firm has gone into FSCS default, the FSCS pays up to £85,000 per eligible claimant.

I was told the transfer was a good idea at the time — can I still claim?

Yes. The legal test is whether the advice met FCA suitability standards, not whether it seemed reasonable to you at the time. Advisers cannot rely on client agreement to defeat a suitability claim.

What is the average pension mis-selling payout?

There is no standard payout — redress is calculated individually. The FSCS pays up to £85,000 where the adviser has failed, and the Financial Ombudsman can award up to £455,000 for complaints referred from 1 April 2026 about advice given after 1 April 2019. Under the FCA's British Steel redress scheme, £8.7 million was offered to 360 former members by April 2024.

Talk to us

Free assessment on 01228 272 395 or start your claim online. Related pages: SIPP mis-selling, DB pension transfer claims, adviser gone bust, financial adviser negligence.