pension question

cranky bollix

my father had invested 2 sums of money in 2 different pension schemes, in 2006 and 2007.He has now retired but his investments are now worth around a fifth of their initial value.

Is this normal, I dont know much about pension funds but I had always thought that they would only invest in prime property which would not fall in price so rapidly, and therefore they investment should never have fallen so much.If anyone could enlighten me on the situation it would be very much appreciated.

dotsman

It is not normal for someone of his age (proximity to retirement).

That being said, it doesn't necessarily mean something sinister occurred. As you are well aware between 2006 and now, there has been massive losses in numerous funds/equities and even property. A lot of people have lost large amounts of money. If he had invested all his money in Anglo he would have got nothing back!

The key here is the financial advise/selling. Did someone advise him to invest in the funds that he did? If so, what were there reasons and were the risks explained?

For a fund to have made such a loss, it would most likely have been a high-risk fund - unsuitable for someone approaching retirement. If he was warned and still chose to take the risk, then there's not much he can do. However, if the warnings were mild/non-existent, then he certainly has a case.

He should formally complain to whoever sold him the funds and see what they have to say (if they produce documents with his signature that clearly state that the fund is high risk and that there is the potential to make large losses etc, then there's probably not a lot he can expect). However, if they cannot prove that he intentionally invested in high-risk funds, and if they are not willing to compensate some (or indeed all) of his original investment, then he could take the matter to the financial ombudsman.

Joe Meade was the previous ombudsman, having just retired, and was very much the champion in the fight against mis-selling of high risk products to pensioners/near pensioners etc. (Check out some of his case studies for a better idea of what to expect). Not sure what the stance of the new guy is, but will probably be along the same lines.

cranky bollix

thanks dotsman for this very useful information,
im not sure if he knew whether he knew they were high risk or not.but ill inform him about this post and see what he thinks

NinjaTruncs

My Dad done something similar, went into a bank (won't say which one) asking to invest in a guaranteed fund, he was put into a non-guaranteed fund and lost about 30% of his investment before realising and getting his money out, he didn't know the difference between the funds when they were sold to him. When he went into the bank he was 67 and quoted on a ten year time frame of investment, which imo is crazy.

FergA.com

If he has any documentation to verify what you say, he should definitely complain to the Ombudsman, per dotsman's post above.