Pheonix Life delay tactics

mandarama

I recently remembered an old (shelved) AV pension policy. I contacted the 'takeover' company Phoenix Life who sent relevant forms and told me:
the value of policy stood at £1700,
the lump sum pay-out figure being £1300
(ballpark figures) - first 25% tax free, the remainder taxable at my given rate (BR as my allowance is taken up.)
I duly read the enclosed paperwork detailing my options then requested the lump sum pay-out, sending the forms back by return.
Two weeks ago, a letter stated they couldn't pay it until they'd spoken directly to me but that, if I couldn't phone, they would begin to process my request on 8th Feb as they already had my mandate!! Not wanting to 'discuss' the matter, I chose to wait.
Today, a letter tells me 'there has been a significant change in the value of your fund.' The value of policy on 11th Feb being £980.

Should I just accept this dramatic change of value, agreeing a payout (not declared) that will approximate to half of the original 'projected' sum?
Or should I make a challenge on the grounds that their delaying tactics have resulted in the fund being depleted?

My instinct is to take the money, circumventing further erosion, then raise a complaint.
(It seems ridiculous, I'm required to communicate my request 3x over and, in the meanwhile, my money remains at their advantage.) Any advice greatly appreciated.

woolly_wombat

Ah yes, Phoenix Life, the infamous 'zombie' pension gobbler.

What sort of pension is it?

Please check very very carefully for any guarantees with this policy which could make it considerably more valuable than than it appears, and which could likely only be honoured if you hold it to maturity.

Incidentally, you might find this article on Phoenix to be of interest:
http://www.independent.co.uk/money/insurance/phoenix-life-chance-of-a-refund-for-overcharged-policyholders-has-risen-10076403.html

mandarama

woolly_wombat wrote: »

Ah yes, Phoenix Life, the infamous 'zombie' pension gobbler.

What sort of pension is it?


The AV policy was originally with Cornhill: matured Nov 2014. Shelved 18 years ago - divorce and health issues meaning I could no longer afford to keep it up.

Taking early retirement 6 years back, I enquired then (age 55) but was told the value of the fund at that point (£600+) was less than the administration charges to cash it in! Communication from the then holding company stopped at that point. I've not moved since that time so it seems clear, no pay-out would be happening at all if I hadn't resurrected the matter.

Thank you also, woolly_wombat, for the article link - really helpful.

I think it likely the best option is to gather in what they offer then pursue a redress from there.

greenglide

Two weeks ago, a letter stated they couldn't pay it until they'd spoken directly to me but that, if I couldn't phone, they would begin to process my request on 8th Feb as they already had my mandate!! Not wanting to 'discuss' the matter,

So next time you are asked to ring them, maybe you should do so?

Maybe you had options then and they have defaulted to a "wrong" one.

You could always ring them now?

A "projection" is never guaranteed. You need to understand why the value of policy stood at £1700 but the lump sum pay-out figure is £1300. There must be a reason, they would know.

Taking the money without asking what the options are would be likely to compromise any grounds for complaint. You are expected to understand the policy you have.

mandarama

greenglide wrote: »

So next time you are asked to ring them, maybe you should do so?

You could always ring them now?

A "projection" is never guaranteed. You need to understand why the value of policy stood at £1700 but the lump sum pay-out figure is £1300. There must be a reason, they would know.

Taking the money without asking what the options are would be likely to compromise any grounds for complaint. You are expected to understand the policy you have.

Thank you greenglide for your response.

I was hoping for input from here before I phone, this afternoon, as it will in all likelihood change my approach to them.

I had read, absorbed, considered and fully understood each of the several options presented in the original package I received. I did not want, or need, a 'hard sell' advisor to go over that same information in a phone call i) I would pay for and ii) in time I didn't, at that point, have.

I also understood and accepted the drop from £1700 to £1300, if I had not I would not have signed the mandate to take the lump sum.

It is the jump from £1700 to £980, a drop of 42%, that is contentious. Has this, in part at least, been caused by (shoddy practice) the company's delay in acting on the mandate I sent them?

greenglide

I did not want, or need, a 'hard sell' advisor

Phoenix are a closed book company so I wouldnt expect them to employ any sales staff which means there arent allowed to sell anything.

It is not as if Phoenix would know in advance that if they took a couple of weeks extra the fund would drop by 40% or so. The reasoning behind that should be your first question?

pem2

I had the same problem last year with a similar small amount and took 4 months to get my lump sum from them. If you complain as I did you will probably get £50 or so compensation, but that won't make up for delay/reduction and if you then take it to the Financial Ombudsman don't expect them to uphold Phoenix's (in my opinion) blatant time wasting.
My advice is to keep it all in writing especially (in my case) they only supplied a 0845 (revenue sharing) number to phone which will eat into your reduction.

dunstonh

Phoenix have no delaying tactics. They have old systems and limited staff numbers. They buy dead or near dead insurance companies for run down.

I did not want, or need, a 'hard sell' advisor to go over that same information in a phone call i) I would pay for and ii) in time I didn't, at that point, have.

Phoenix do not employ advisers.

They do follow the lines of defence set by the regulator if you do not use an adviser.

y instinct is to take the money, circumventing further erosion, then raise a complaint.

As you knew you were taking this money out some time ago, did you ask them to switch to a cash fund (or similar low risk fund)? Or did you leave it in the fund it was in (which would be subject to investment returns whether up or down)?

A couple of weeks is nothing. The ombudsman generally allows 30 days from maturity and that is on scheduled exit points. You had 2 weeks on an unscheduled request.

mandarama

dunstonh wrote: »

Phoenix have no delaying tactics. They have old systems and limited staff numbers. They buy dead or near dead insurance companies for run down.



Phoenix do not employ advisers.

They do follow the lines of defence set by the regulator if you do not use an adviser.



As you knew you were taking this money out some time ago, did you ask them to switch to a cash fund (or similar low risk fund)? Or did you leave it in the fund it was in (which would be subject to investment returns whether up or down)?

A couple of weeks is nothing. The ombudsman generally allows 30 days from maturity and that is on scheduled exit points. You had 2 weeks on an unscheduled request.

Thank you for your thoughts. To be clear though:


I'd not had dealings with Phoenix prior to recently tracking them down as the holders of this account, so had no understanding as to whether or not they 'do' sales. The language of their request for further contact suggested that they did.

The account matured in Nov 2014, but I'd been told by a previous heritage company it was ostensibly redundant. I therefore had no remaining aspiration to cash it in, until I recently realised new laws might have changed the playing field. There was no communication from Phoenix, post maturation, suggesting I move it to a cash fund. I did not seek such information as I'd, in effect, written it off.


I find the Phoenix process extremely patronising in that, once I have ticked the box to say I've read and understood the materials provided and have signed a mandate, I be required to jump through further hoops in order to access what is legitimately mine. They are either: saying the customer is too thick to understand, so we have to keep repeating the same sentences until we're happy it's sunk into their paltry brain cells, or it's a delaying tactic - whether that is a few weeks, or several months - as experienced by another responder to this post.

dunstonh

The account matured in Nov 2014, but I'd been told by a previous heritage company it was ostensibly redundant.

Pensions mature at age 75. Anything under 75 is a selected retirement date and can be deferred until age 75. So, it remains invested until you decide to change something or your adviser recommends a change.

There was no communication from Phoenix, post maturation, suggesting I move it to a cash fund. I did not seek such information as I'd, in effect, written it off.

Phoenix have no advisers. They do not have the regulatory permissions to recommend changes. They take instructions. They dont know anything about you to make recommendations. Fund selection is either done by yourself or your adviser. Not the provider who will only act on your choice or your adviser's choice.

I find the Phoenix process extremely patronising in that, once I have ticked the box to say I've read and understood the materials provided and have signed a mandate, I be required to jump through further hoops in order to access what is legitimately mine.

Part of the the problem with Phoenix is that one part of Phoenix can be very efficient and another part really slow and old fashioned. As they buy old life company books, they buy the computers/systems that go with it. As Phoenix are not open for new business, they do not spend the resources on options for modern plans. They use the old software the old provider had and aim over time to try and consolidate it where they can. For example, a lot of the plans that are administered out of Phoenix in Peterborough use the old Pearl software. The layout of the information is much the same as it was 15 years ago for Pearl plans. The office in Scotland seems less efficient than Peterborough.

. They are either: saying the customer is too thick to understand, so we have to keep repeating the same sentences until we're happy it's sunk into their paltry brain cells, or it's a delaying tactic - whether that is a few weeks, or several months - as experienced by another responder to this post.

A lot of customers are too think to understand, as you put it. There is an element of having to cater for the lowest common denominator. We also live in a highly regulated time where the ombudsman and regulator also think the average consumer is a bit on the dim side and if its not pointed out to them clearly, they will force the company to pay redress or a fine. This can be quite frustrating to educated consumers.

There have actually been no rule changes that affect your fund. It is of an amount that has been considered trivial for many years. So, you could have utilised triviality or stranded pot since 2009 to access it as a lump sum (providing you were aged over 60).

Ian011

pem2 wrote: »

My advice is to keep it all in writing especially (in my case) they only supplied a 0845 (revenue sharing) number to phone which will eat into your reduction.

FCA regulations effective 26 October 2015 require an 01, 02, 03 or 080 number. You should also press for your call costs to be refunded.