SERPS/S2P alternatives not widely missold

There is no evidence of widespread misselling of Appropriate Personal Pensions (APPs) to people who contracted out of the State Second Pension (S2P) / State Earnings Related Pension Scheme (SERPS), according to the FSA. It estimates that only about 1.5% or 120,000 APP policies out of eight million were sold to customers above the ‘pivotal ages’ set by industry, the points at switches to private provision were judged disadvantageous. The regulator notes that while some of these individuals may have been wrongly advised, there might also be reasonable explanations for their decision to contract out, including a desire to control their own investments rather than trusting to government pension policy and the chance to pass on the pension contributions to their dependants if they died before retirement. The FSA has published a guide on how to complain for those who were above the pivotal age when they contracted out and believe they may have been missold. It is available at www.moneymadeclear.fsa.gov.uk