Father in Law told he has lost his guaranteed annuity payment

kbadger1

Scottish Widows was selected 30 years ago as a pension fund provider. Over that period of time a fund has accrued for retirement however my father in law has been told that his pension will reduce from £13,939pa to £8,646pa as he did not inform them by his official retirement date of the 1st December 2006 what form of pension he wished to take.

He is currently still working but now wishes to retire but the above means he will face financial difficulties. There was no warning that the pension could or would be reduced if the date of 1st December was missed - £5,000per annum seems a lot to lose jsut by missing a deadline when no warning was ever given that this would be the case.

Is there anything that can be done to rectify this situation?

K. Badger, on behalf of Mr Barry Lomas

EdInvestor

You could try complaining to Widows and then to the FOS (Ombudsman).But these GARs are bound by strict contractual conditions, and they are now valuable, as you can see. The insurer is entitled to withdraw them if the conditions of the contract are not observed.

The high profile Equitable Life case (where the House of Lords forced the insurer to abide by the letter of the law on its GAR contracts) would tend to bolster the insurers' position in sticking by the contractual conditions.

Debt_Free_Chick

I rather suspect that the GAR was only available if he took his pension on the original retirement date (1 December). By not taking his pension then, the original policy terms are effectively "cancelled".

This is probably set out in the small print in the policy, but I would have thought that Scottish Widows would have also written to your father to confirm this. Are you sure he didn't get a letter before December?

Even if he didn't, if the cancellation of the GAR is in the policy, I fear he has little redress.