Mistake with annuity, what do I do?

mania112

Did the annuity provider make the mistake or did the IFA fill in the forms wrong?

Either way, sounds like it might be worth pursuing because £200 isn't much and you've not received what you asked for.

bmm78

When handling a regulated complaint, the onus is on the firm who has made the error to restore the client to the position they would have been in if the mistake had not happened. The idea is that they "put right" what has went wrong, as much as is possible depending on the circumstances.

If the annuity provider has admitted they have made an error, the redress should be based on "what you could have won" compared to what you actually did get.

In this situation it is complex, as without knowing the figures it is difficult to say how long it is likely to take for the escalating income to match and then beat the level income.

The complaint response should clearly state how they calculated the compensation payment. £200 sounds like a typical "inconvenience" payment, rather than compensation for financial loss. It may be that the provider concluded that you will be financially better off with the escalating income, but acknowledged that you should have had the right to choose and the compensation relates to this?

Either way, the firm should have explained why they think £200 is a reasonable conclusion to the matter. I wouldn't want to comment on whether this figure is reasonable, as I'm not aware of the full facts of the case. However, part of their responsibility is to explain to you why they think it is reasonable, and if you conclude that it isn't it's worth at least calling the Ombudsman helpline for an informal chat about it.

Mrs_Mum99

No, there is no explanation as to how the £200 is arrived at, it is called a 'compensation' payment.
It will take about 11 years for the escalating annuity to equal the level annuity without taking inflation into account.
Thank you, I will call the Ombudsman tomorrow.

bmm78

From the info on the thread it doesn't seem like they have done a great job in handling the complaint. Even if they consider that their offer of compensation is reasonable, they do not appear to have made much effort to try and convince you that this is indeed the case.

This is a useful link to the Ombudsman site where they give examples of compensation for "non-financial" loss:

http://www.financial-ombudsman.org.uk/publications/technical_notes/distress-and-inconvenience.htm

In my opinion, the inconvenience caused by having £1300pa less starting income is more significant than the examples listed for £200, regardless of how they view the benefits of escalating income in the longer term.

If you decide to refer the complaint to the Ombudsman, I think it's a good idea to be as specific as possible in what you want them to do to put things right. I can understand why some people don't like doing that and prefer to keep their cards close to their chest, but in my experience you'll stand a better chance of getting what you want if you state exactly what that is.

82much

If I were you I would write to the CEO personally of the company first outlining the whole case and telling him how unhappy you are with the service. I did this and got a really terrific response. Staff will often not bother with complaints but if the boss gets involved they all jump through hoops. Good luck

Mrs_Mum99

I have lodged my complaint with the Ombudsman, they are sending me the relevant forms.
I think I shall ask for the difference in annuities up until the point they become equal plus an amount for aggravation/ upset etc. and see what happens!

Mrs_Mum99

Just an update on my case.

The Ombudsman found that the amount paid by Just Retirement was fair.
I raised a complaint with Sesame who upheld my complaint as the IFA had filled in the wrong forms so my pension fund went across with the GMP. The compensation put me in the position I would have been in if I had the level annuity I requested, always assuming I live to 83!!
It has been a long drawn out process. I picked the IFA from Unbiased, he appeared to have all the relevant pension qualifications. The only reason I employed an IFA was because of the GMP and I didn't want anything to go wrong. A mistake which cost £1300 in his fees alone which I did not get back! I could have saved that money and got it wrong myself.

jamesd

Thanks for the update. Glad to read that Sesame upheld your complaint in what seems like a clear error case.

gadgetmind

Mrs_Mum99 wrote: »

A mistake which cost £1300 in his fees alone which I did not get back! I could have saved that money and got it wrong myself.

So, the IFA screwed up yet got to keep the fees? Were they really that "teflon"? Didn't anything stick?

dunstonh

gadgetmind wrote: »

So, the IFA screwed up yet got to keep the fees? Were they really that "teflon"? Didn't anything stick?

Normally with annuities, the fee is not explicit. The redress would be based on the annuity rate net of commission/fee deducted. So, it would be paid back but reflected in the product differences.