Standard life repayment from old transfer

DavidRossitter

I transferred from a standard life pension to my SIPP nearly 10 years ago and out of the blue I received a letter saying they had miscalculated the transfer value enclosing a cheque for the difference. Has anyone else received this as I was thinking of going back and asking for compensation as over 10 years it would have increased by a fair amount

AnotherJoe

DavidRossitter wrote: »

I transferred from a standard life pension to my SIPP nearly 10 years ago and out of the blue I received a letter saying they had miscalculated the transfer value enclosing a cheque for the difference. Has anyone else received this as I was thinking of going back and asking for compensation as over 10 years it would have increased by a fair amount

I agree and you do have a metric to show that increase, the per cent rise of your SIPP over that time. Though that would need disentangling from any additional contributions you made to the SIPP in the past 10 years which could be problematic to work out what the effect of that was.

The only other thing is I believe that there is a statutory 8% per year applied in similar cases of money owed (not sure of the details) and you could just use that.Hopefully someone else can flesh out the details of that.

dunstonh

Has anyone else received this as I was thinking of going back and asking for compensation as over 10 years it would have increased by a fair amount

Are they not giving you the standard 8% simple interest that is normally added?

DavidRossitter

No mention of it at all. 8% compounded over almost 10 years doubles the figure I have been offered. What s the basis of 8% as the typical figure to be used?

xylophone

You mention compound interest - dunstonh simple

There's quite a difference.

http://www.financial-ombudsman.org.uk/publications/technical_notes/compensation-for-investment-loss.htm

the interest rate we use

We usually tell businesses to pay interest at the statutory rate, which is currently 8% simple. When this relates to a period before 1 April 1993, we take into account the fact that the statutory rate was 15% simple at that time.

dunstonh

Raise the 8% simple with them. Although, I have come across this scenario before and they gave the latest unit price against the number of units that were "left behind". So, again, ask the question as to whether this is the value back then or the investment return adjusted value.

DavidRossitter

I have exchanged emails with Standard Life today and they say they have added interest on the basis of the "Bank Of England base rate plus 1%." which seems a bit miserly (though 9 years ago does catch things when rates were nearer 5, but for most of the time they will have been much lower).

Whats the basis of the "statutory 8%" figure mentioned in previous posts otherwise its my method v theirs?

Thanks for all the help so far

dunstonh

Whats the basis of the "statutory 8%" figure mentioned in previous posts otherwise its my method v theirs?

8% simple tends to be used on mis-sales. base+1 on errors.

AnotherJoe

Is there any way you can, for example clearly show that the funds in your SIPP have grown at compounded X% and therefore you wish to have £Y to be placed in the position you would have been in now, had they paid the correct sum?

I appreciate if you have been adding money and changing investments in your SIPP over the years that would be close to impossible. OTOH if you bought say Acme Fund with all the money and still have that in the SIPP, you can work out your gain. (and if its less than BR+1, (a) keep quiet and (b) Sell Acme Fund.)

Malthusian

Demanding they compensate you based on the performance of the funds you invested in at the SIPP is problematic because obviously you would tell them you invested your entire SIPP in AXA Framlington Biotech. Although you could always try it as a highball offer...

However offering you the difference back then, with no allowance for inflation or investment growth at all, is taking the P. (I'm actually surprised they're trying it.) Allowing for inflation they're essentially pocketing 25% of the money they've held back all these years.

Personally I would ask for interest at the statutory rate as it is clearly their error and there seems to be a good chance that the FOS would award that, based on the link that xylophone posted.