Given the nature of pension mis-selling, you’d be forgiven for thinking that it’s only those closer to retirement age who are at risk. There is a lot of truth in that because naturally these individuals are actively interested in their pension and are therefore open to alternative forms of saving.
That said, younger people are at risk too. Here’s a brief run-through of all the ways younger people are vulnerable to pension mis-selling.
Young people are generally pessimistic about pensions
A survey conducted by financial provider Canada Life UK (January 2019) has shown that one in seven (14%) people think that state pensions will not exist by the time they retire – this includes one in five (20%) of 18-24-year-olds. What this means is that, if they do not necessarily believe in the pensions provided by their state then they will be more willing to listen to other alternatives. Namely, the lure of (mis-sold) private pensions that may seem more advantageous than what the state can offer.
This cynical approach to state pensions reflects a widespread discontent among younger populations with the current state of things in the UK, and amid Brexit uncertainty, these people have less reason to expect too much. All of this adds up to the perfect landscape in which ill-advised pension opportunities are taken up.
Many lack sufficient financial planning skills
According to research (the Young Adults and Money Management survey) conducted by the Money Advice Service, one in five young adults (22%) are not confident managing money. The report suggests that an essential life skill like budgeting is considered ‘boring’, while taboos exist around the topic of money itself – this makes it an uncomfortable topic to talk candidly about.
With little faith and confidence in their ability to manage spending and general money management, there is a strong argument for the vulnerability of young people and, particularly, their susceptibility in regard to mis-sold financial products.
How young people can protect themselves
As we’ve shown, despite the majority of mis-sold pension victims being closer to retirement age, there are numerous convincing arguments for the vulnerability of younger people who either feel:
- Failed by the current pensions system and, as a result, are open to alternative schemes that do not have their best interests in mind. The suggested lack of financial know-how and experience exacerbates this.
- Confident enough to seek other alternatives to a safe and secure workplace/state pension. The surge in popularity of digital investment platforms and the ‘get-rich-quick’ culture can give young people a false sense of security/confidence.
Either way, there are guaranteed ways in which you can determine whether or not you’ve been mis-sold a pension. Here are just a few:
- Your advisor isn’t as experienced as they said they were.
- The terms and conditions weren’t fully explained.
- Your advisor recommended a pension/investment with more risk than you were prepared for
Be sure to inform yourself on mis-sold pensions and claiming mis-sold pension compensation – information is key to protecting your pension pot. You can contact our team on 0161 968 0768 and even start a claim in just 30 seconds anywhere on our website.