‘My wife’s pension is stuck in a failed firm – and she’s still paying the financial adviser that put it there’

Write to Pensions Doctor with your pension problem: pensionsdoctor@telegraph.co.uk. Columns are published weekly.

Dear Becky,

My wife has a pension with Hartley Pensions, which was placed in administration in July 2022, in circumstances that have never really been made clear to me. This issue must affect many people.

During this time, I have received some very strange emails from a Hartley director, emails from the receivers UHY Hacker Young, and emails from the independent financial adviser (IFA) who set up the pension for me.

I can supply these emails on request.

Since the fund has been in administration, it has been suspended, and all transfers, movements, etc have been stopped. It is expected that funds will begin to become available for transfer in September.

My question is whether she will be compensated for loss of growth (the funds are not doing well when compared to my pension), as she would have moved them in late 2022 – something that she was not allowed to do.

The IFA she used charged 1pc on contributions for, among other things “ensuring that the investments within the pension remain appropriate for you and do not need to be changed”.

Is there any scope for loss recovery from the Financial Conduct Authority, or the IFA she used?

We are keen to put this whole sorry saga behind us, and any advice would be very welcome indeed.

Sincerely, Rob

Dear Rob, 

Firstly, I am sorry to hear your wife is caught up in this administration: along with thousands of other Sipp customers of Hartley Pensions. 

I contacted UHY Hacker Young, the administrators of Hartley Pensions, and was told: “Clients are able to draw down money from their pensions in the usual manner, to pay for living expenses or make purchases however they choose. They can also trade investments and request their pension commencement lump sum. 

“The only restrictions in place are that no further contributions can be made to client Sipps, and that the administrators are unable to facilitate transfers out at this time. Transfers are restricted until such time as the exit and administration charge is ratified by the courts, in order to ensure all clients are treated fairly.” 

According to reports, the plan is that customers’ funds will be moved across to new providers and that to treat everyone fairly, this can’t be made possible for some customers ahead of others. However, the administrators could consider transfers on a case by case basis, if, for example, the customer is considered vulnerable.

So your wife will face an administration fee when she is eventually able to transfer the pension – this is what the administrators are currently waiting to have ratified in court. Once the fees are agreed, your wife should be able to move her pension.

The administrators expect this will be completed by November, meaning the first transfers are unlikely to take place until early next year. This has been seriously delayed – the original expectation was that it would be resolved early this year. 

Once the fees are agreed and transfers out are permitted again, you will have a clearer idea of how much has been lost due to performance and also to fees, and therefore if you wanted to make a claim for compensation and how much for.

Your wife is not the only person desperately seeking information, reassurance and recompense; one customer has apparently set up a campaign group. Many grievances are around the fees being charged rather than poor investment performance.   

In May this year, the Financial Ombudsman Service found against Hartley Pensions in a complaint raised by a client over excessive fees for Sipp administration. So there is precedent on that particular issue, although not all customers are being charged the same fees, as many were acquired when Hartley bought other pension providers and their fees from their previous provider carried over.

In terms of where your wife might seek compensation and for what, her case highlights how difficult this can be when there are so many parties involved, and a number of different organisations that could play a role in redress – as well as two potentially different causes for complaint: the first being with Bristol-based Hartley Pensions, and the second being with your IFA.

Bear in mind that complaints go to the firm involved first, before being referred to other organisations. In this case, if you choose to complain about the investments your wife has been stuck with and the fact that she has been unable to transfer out when she wanted to (and possibly the fees being charged, too), this would be directed to the administrators, giving them eight weeks to reply.

Or you could complain to the IFA about unsuitable advice and again wait for a reply. It could also be worth asking the IFA if they could agree to waive the 1pc fee for the past year.

Redress would have to come from the Financial Services Compensation Scheme (FSCS) if you complain to Hartley, as it is in administration. The FSCS is currently investigating Hartley Pensions and says although it has not opened for claims, it is working closely with the joint administrators to understand whether there are any protected claims that would allow it to pay compensation. The limit to FSCS compensation here would be £85,000.

I just also want to add that customers of Hartley Pensions may be vulnerable to scam attempts. The Financial Conduct Authority has issued warnings about cold calls to customers reporting to be from Hartley Pensions, which should be ignored and reported to hartleypensions@uhy-uk.com, or 0800 063 9113 (UK callers), +44 20 3282 8151 (international callers). 

Updates on the status of the administration and its impact on customers are being posted to the Hartley Pensions website.

As ever, email your questions to pensionsdoctor@telegraph.co.uk