The pension transfer you were told was a good idea: What veterans need to know

An Independent Financial Advisor sat across a table and explained that your military pension was not performing as well as it could. That transferring out was the smart move. That the new arrangement would serve you better in the long run.

Many thousands of service personnel received some version of that conversation between the late 1990s and April 2015, when transfers out of the Armed Forces Pension Scheme were finally banned. For a significant number of them, the advice was wrong. And for some, it was wrong in a way that is still actionable today.

What the Armed Forces Pension Scheme actually offers

The AFPS is a defined benefit scheme. That means the pension it pays is guaranteed, calculated on the basis of your service and salary, and index-linked. It does not depend on investment performance. It does not go down if markets fall. It pays out for life.

These are not standard features of private pension arrangements. They are exceptional ones. The cost of replicating the AFPS guarantee in a private pension would be enormous, and in most cases it simply cannot be done.

When an IFA recommended transferring out of the AFPS, they were recommending that a service person give up a guaranteed, index-linked, lifelong income in exchange for a pot of money invested in markets. In the majority of cases, the long-term outcome has been significantly worse than staying put would have been.

Why it happened

Several factors converged. The pension transfer market was poorly regulated through the 1990s and early 2000s. IFAs earned commission on transfers, which created an obvious conflict of interest. The rules requiring advisers to demonstrate that a transfer was genuinely in the client's interest were not consistently enforced.

Service personnel were also, in many cases, not ideally placed to scrutinise the advice. A corporal in their twenties or thirties, focused on their career and their unit, sitting in front of a qualified financial professional who appeared to know what they were talking about, was unlikely to push back effectively. The power imbalance was real.

The ban on AFPS transfers in April 2015 was a recognition that something had gone systematically wrong. It did not fix what had already happened to those who transferred before that date.

Whether anything can still be done

The short answer is: it depends, and the time to find out is now.

Mis-selling claims of this kind are subject to limitation periods. In most cases, that means six years from the date of the advice, or three years from when you became aware, or ought reasonably to have become aware, that something was wrong. The second limb, the three-year awareness test, can extend the window considerably, but it does not extend indefinitely.

The adviser's firm may no longer exist. That is not necessarily a barrier. If the firm held professional indemnity insurance, as regulated firms were required to do, claims may still be possible against the insurer. Where that route is not available, the Financial Services Compensation Scheme provides a further avenue, with compensation limits that have increased significantly in recent years.

What a review involves

The starting point is understanding what happened. What advice was given, when, by whom, and on what basis. What was transferred and what the difference in outcome has been. This is paperwork-heavy but not impossible, and a specialist team can handle most of it.

The review then assesses whether the advice met the standard the adviser was legally required to meet. That standard required them to gather sufficient information about your circumstances, explain the specific benefits you would be giving up under the AFPS, and demonstrate that the transfer was genuinely suitable for you.

In many cases, one or more of those requirements was not met. The needs assessment was cursory. The guaranteed nature of the AFPS benefits was not explained in a way the client could properly understand. The recommendation was not demonstrably in the client's interest.

The honest caveat

Not every transfer was negligent advice. Some IFAs did carry out proper assessments and some transfers were, in the individual circumstances, genuinely appropriate. A review will tell you which category your situation falls into. If there is no viable claim, that answer is also useful to have.

What is not useful is assuming there is nothing to look at without having checked. The stakes are high enough, and the potential recovery significant enough, that a proper review is worth seeking.

We have helped veterans in exactly this situation

At Justice4Heroes, we work with service personnel who were advised to transfer out of the AFPS and have since questioned whether that advice was right. We know how these cases work, we know the routes available even where the original firm no longer exists, and we know how to find out quickly whether there is a claim worth pursuing.

You do not need to have kept all the paperwork. You do not need to be certain something went wrong. You just need to pick up the phone and tell us what happened. We will take it from there.There is no charge for the review, no obligation to proceed, and no fee of any kind unless your claim succeeds. Call 0800 776 5622 or visit www.justice4heroes.org.