If you want to complain about pension advice or how your scheme is run, don’t expect it to be an easy road.
MPs have described financial advisers who encouraged thousands of steelworkers to transfer out of their British Steel final-salary pension scheme as “vultures”, and accused the Financial Conduct Authority (FCA) of not acting quickly enough to protect them from poor advice.
But while those affected by the “major mis-selling scandal” that arose after Tata’s restructuring of the British Steel fund are now entitled to seek redress, unfortunately the complexity of the complaints system is almost as bad as the “patchwork quilt” of pensions regulation that could be blamed for the scandal in the first place.
The best option for people who have potentially been mis-sold a pension transfer is to go to the Financial Ombudsman Service, which has the power to force independent financial advisers to compensate customers they have let down. However, the ombudsman won’t get involved in disputes unless consumers have made a formal complaint to the firm itself and are unhappy with the response received. Consumers must give companies up to eight weeks to consider their complaint before contacting the ombudsman.
Another possibility is for victims to complain to the Pensions Ombudsman, a separate scheme set up to help people with complaints about the way in which both individual and occupational pensions are run. Importantly, this ombudsman can’t get involved with disputes about the quality of advice, or the benefits pension savers receive, but it can intervene in cases where the complaint is about the management of a pension scheme. By the end of last year the Pension Ombudsman had received around 150 complaints about the British Steel scheme.
A third option – though probably a last resort – is to complain about the City regulator itself. Anyone affected by the FCA’s actions – or inactions – is entitled to lodge a complaint with the regulator, and to have their case heard by the independent Complaints Commissioner if they’re not happy with the response.
Streamlined system on the cards
The time taken to resolve complaints about pension schemes could be halved, says the Pensions Ombudsman, under plans to streamline the system governing disputes. The proposals follow complaints that some cases have taken up to four years to resolve, amid confusion about the role of the ombudsman and The Pensions Advisory Service (the TPAS, which is an independent body that also has powers to investigate such cases).
For now, if you have a complaint about your pension scheme, you can either ask the TPAS to help settle a dispute before making a formal complaint to the scheme, or you can go to the Pensions Ombudsman, which has legal powers to resolve complaints that cannot be resolved between the scheme and a member.
But from April the complaints services of the two organisations are to be merged, creating a single body with responsibility for pension-scheme complaints. The move will reduce the average time taken to resolve complaints from ten months to five months, claims the Ombudsman. TPAS will continue to provide information and advice.
Tax tip of the week
If you rent out a property in the UK but live abroad, you still have to pay tax on your rental income, warns HM Revenue & Customs (HMRC). For tax purposes, you’re classed as a non-resident landlord if you live abroad for six months or more per year. If you want to pay by self-assessment, fill in form NRL1 and send this back to HMRC. If approved, HMRC will tell your letting agent or tenant (who must register with HMRC) not to deduct tax from your rent.
You then declare it in your self-assessment return. Alternatively, your letting agent or tenant (if they pay more than £100 a week) can deduct basic-rate tax from the rent, after expenses. They then have to pay the tax to HMRC quarterly; send a report each year to HMRC (form NRLY); and give you a certificate (NRL6) each year, saying how much tax they’ve deducted.
MPs shape up for new battle over pensions
Reports that Philip Green is in talks to sell his Arcadia fashion group could see a renewal of hostilities between MP Frank Field and the high-profile retailer. Field, who last year clashed with Green (pictured) following the collapse of the BHS group, has already said the Work and Pensions Committee will scrutinise the pension schemes run by Arcadia, which are thought to be around £1bn in deficit.
Such a deal will also underline again the limited protections in place for members of a pension scheme when the employer sponsoring their plan changes. Although last year’s Conservative manifesto promised new powers for the Pensions Regulator to veto company takeovers and mergers in cases where it believes a deal would result in pension-scheme members losing out, ministers have not yet come up with workable proposals.
Nor is it clear that the regulator would be able to exploit such powers. It’s already come under fire for its failure to require Carillion to pay more into its defined-benefit pension schemes in recent years, despite having powers to challenge firms to move faster to close deficits. In response, the regulator points to its responsibility to ensure firms remain financially viable and able to keep paying into pension schemes over the long term.