Investigation Launched over Uninvested Pension Fund: £8,500 Lost in Stock Market Crash – Crane Under Scrutiny
In the '80s, I opened a personal pension with Wesleyan Financial Services. Back then, lifestyling - a process where pension funds are shifted to lower-risk investments as retirement approaches - wasn't commonly practiced.
Fast forward to recent years, I started receiving letters and emails suggesting my pension would be switched to a lower-risk fund five years before my planned retirement date (initially set for March 2020). However, my pension remained in a moderate-to-high risk/high reward fund until March 2020.
I noticed the discrepancy and asked them to manually change my pension's investment strategy the same month. I also requested that my retirement date be moved forward five years to March 2025.
Unfortunately, the stock market took a hit due to the pandemic, causing a shortfall in my pension fund. I believe if my pension had been moved to a lower-risk fund in 2015, as promised by Wesleyan, I might've lost less money. The loss was about £8,500.
Helen Crane from This is Money shared my story, as those approaching retirement might worry about stock market fluctuations, especially due to the tariffs imposed by Donald Trump. The downturn made my pension drop by about 20%, from £50,500 in March 2020 to around £39,000 in April 2021.
Despite the lifestyling information provided in the generic literature and the letters I received, lifestyling wasn't applied to my pension plan, as it was an older plan and lifestyling wasn't standard back then. Wesleyan confirmed that lifestyling could only be activated if I specifically requested it.
Wesleyan had previously investigated a complaint from me, but it was not upheld. They also stated that the Financial Ombudsman Service agreed with their finding, absolving them of any financial loss accountability.
The spokesperson for Wesleyan Group acknowledged my complaint but maintained that both Wesleyan and the Financial Ombudsman had already thoroughly investigated the matter and found no accountability on their part.
While some information provided by Wesleyan could have been clearer, particularly the fact that the generic lifestyling 'information sheet' did not reflect my situation, individuals that actually had their pensions lifestyled in recent years have also experienced losses, due to lower-risk funds heavily being invested in government bonds that dropped in value after the 2022 mini-Budget.
In conclusion, my pension mismanagement story serves as a reminder for those approaching retirement to carefully evaluate their pension investments, stay informed about the stock market, and seek expert advice when needed.
- Given its lack of implementation in the '80s, I wish I had requested lifestyling for my pension with Wesleyan Financial Services, a process that shifts pension funds to lower-risk investments as retirement approaches.
- Despite Wesleyan confirming that lifestyling could only be activated if I specifically requested it, I find it unfortunate that I wasn't informed about this option earlier, as my pension remained in a moderate-to-high risk fund.
- I decided to invest some of my personal-finance into lower-risk funds after realizing the loss of £8,500, a sum I believe would have been reduced had my pension been moved to a lower-risk fund in 2015 as promised.
- In recent years, I have been receiving letters and emails suggesting my pension would be switched to a lower-risk fund, but this never occurred, and I finished up with a defined contribution pension that fell short of my expectations.
- As someone who follows personal-finance matters closely, it is crucial for financial institutions like Wesleyan to clarify their lifestyling policies and provide transparent information to clients, enabling them to make informed decisions about their pension investing.
