Legal & General warning

hogweed

The purpose of this post is to detail my experiences with trying to get L&G to pay my pension, which is now overdue by more than a month, with seemingly little prospect of payment in February either. If you’re thinking of doing business with L&G, read on. And look at their online ratings – typically 20-25% of their customers rate them as “bad”. I don’t know of any other company whose customers are so dissatisfied.


This sorry tale began in 1993, when I (knowing nothing) was persuaded by an IFA to transfer my British Telecom pension (defined benefits, index linked, provision for dependents etc – more or less equivalent to a Civil Service pension) into a money purchase scheme with Scottish Equitable (now AEGON). I was told that the SE one would greatly outperform the BT one, I’d be able to retire at 50 etc etc.


In fact, the SE one performed miserably, not getting anywhere near even matching the BT one, never mind outperforming it spectacularly. I told the Ombudsman I felt I’d been given very bad advice, but got a kind of a “Meh – you knew what you were doing, it was your choice” in return.


Fortunately, perhaps foreseeing this, the government (as I understand it) imposed terms on such pension transfers, guaranteeing me a certain level of pension on retirement (GMP), regardless of AEGON fund performance.


As I was to turn 65 in December 2019, in October I contacted AEGON to make sure everything was in place. They sent me sheaves of paperwork telling me that my pension would in fact be paid by L&G, to whom they’d transfer the appropriate funds. I didn’t like the sound of this, but was told I had no say in the matter.


I contacted L&G; they sent me some forms of authority; I signed and returned them. They said they’d pay each monthly payment at the beginning of the month. Two weeks into January, I phoned them, only to be told that “We haven't heard back from AEGON yet – when we do, in 7-10 working days (so 2 weeks) we’ll write to you, asking if you want to proceed (like I had a choice). Then we’ll pay your first monthly payment in another 2 weeks.


I wasn’t very happy – I’ve been unemployed for 2 years, reserve savings gone now, and resources are very thin. I’d been really depending on my pension starting on time. I spoke to AEGON – unlike L&G, they were very helpful, but told me the reason they hadn’t transferred the funds to L&G was that the latter had given them incorrect details for me – eg date of birth and NI number.


I complained to L&G, but they were very dismissive, simply ignoring my questions (eg whether AEGON’s allegation was true), and going into broken record mode about “when we receive the funds, it will take 2 weeks to process them, and send you some forms of authority (I signed these months ago – has to be done twice, apparently) then, after I send them back, another 2 weeks before I receive my first monthly payment.


So it looks like – at best – my pension will begin in the 3rd month following my retirement. I am very angry, and feeling very insecure; I wouldn't trust L&G to run a raffle. It seems that, even though I never selected them as my pension provider, I’ve been forced to do business with them for something which will affect the rest of my life.


I have asked for the complaint to be escalated, but have heard nothing. Ombudsman next – but, based on my experiences of 25-30 years ago, I’m not filled with hope at that prospect.


I hope my story is of some interest to anyone thinking of doing any kind of business with L&G – to me, they reek of unprofessionalism, and treat their customers with something approaching contempt.


Be warned.

xylophone

It seems you had a S32 policy with SE/Aegon.

https://www.financialadvice.net/s32_buy_out_plan/zone/1288

SE/Aegon did transfer certain policies to L&G but I am assuming that if yours had been one of them, you would have been advised.

https://www.legalandgeneralgroup.com/investors/aegon-to-legal-general-transfer/

Presumably therefore your situation is connected with this

https://www.legalandgeneral.com/agn/

A S32 policy is in effect a deferred annuity.

The administration of your pension payment does appear to have been very poor - I am not sure why you yourself have had to act as a go between.

You can make a formal complaint in writing.

TPAS might help.

https://www.pensionsadvisoryservice.org.uk/

hogweed

Thanks xylophone, helpful as ever

xylophone wrote: »

It seems you had a S32 policy with SE/Aegon.

Indeed

xylophone wrote: »

SE/Aegon did transfer certain policies to L&G but I am assuming that if yours had been one of them, you would have been advised.

There were no further contributions since 1993; the money stayed with AEGON till my retirement date (December), then I was told that all pensions like mine were being transferred to L&G to pay the actual pension.


I don’t appear to have the option to look elsewhere, owing to the massive shortfall that has to be made up – some exclusive arrangement (alluded to in your link, I think) has been made between AEGON and L&G.


I was only advised of L&G's involvement when the pension was nearing retirement time.

xylophone wrote: »

The administration of your pension payment does appear to have been very poor - I am not sure why you yourself have had to act as a go between.

Because L&G aren’t interested. You kind of get a quick gut feeling when dealing with a company, don’t you… from Day 1 mine concerning L&G was apprehensive. They have zero sense of urgency; are unapologetic; customer service seems to be an unknown concept there.

xylophone wrote: »

You can make a formal complaint in writing.

Ummm… does email count? If so, I have. The trouble is, it all takes so LONG – I really need the money now.

xylophone wrote: »

TPAS might help.

https://www.pensionsadvisoryservice.org.uk/

Thanks again – will look at that.

hogweed

Right, an update for anyone who may be interested… after daily harassment of L&G for nearly 2 months, I finally received my first ever pension payment yesterday – bear in mind I turned 65 last year.

L&G have been, for sure, the most unhelpful & incompetent company I can remember dealing with since the 80s. I can summarise their response to any question or issue very simply: “Well, we’ll look into that, which will take 7-10 working days (so 2 weeks). If you don’t like our response, we’ll look into it – which will take a further 7-10.” And so on.

Oh, and the other response, eg to questions such as “I’ve been unemployed for 2 years, am completely broke, and am desperate for some money – is there anything you can do to speed the process up a little, as it’s your errors which mean I’m not getting paid?” No. If pressed, that response expands to “No. It’ll take as long as it takes. There’s no way of speeding it up.”

My formal complaint has been greeted with a lukewarm apology, and a derisory offer of compensation, so I’ve started the process with the Ombudsman. Will update here when done.

I pity anyone else who has to deal with L&G – I hope you don’t have to.

 

 

xylophone

Have you obtained a State Pension forecast?
https://www.gov.uk/state-pension-age

hogweed

xylophone said:

Have you obtained a State Pension forecast?
https://www.gov.uk/state-pension-age

Yes thanks (don't get it for another year) - and, despite having been gully paid up, am now expected to cough a further £1500-odd to fully pay it up AGAIN.. I'll do it, but it'll take me 3 years to break even; after that, I'll be £40 a month beter off...

Dazed_and_C0nfused

Do you mean you paid lower NI contributions whilst contracted out?

Anyway you could always start a small business and make voluntary Class 2 National Insurance contributions instead.  That would be maybe £310 for two years instead of £1500.

hogweed

Dazed_and_C0nfused said:

Do you mean you paid lower NI contributions whilst contracted out?

Anyway you could always start a small business and make voluntary Class 2 National Insurance contributions instead.  That would be maybe £310 for two years instead of £1500.

No, I lived in England most of my working life. I checked in the late 90s, when I discovered I'd been ripped off by an IFA, as I wanted to make sure my state pension was safe, and it was fully paid up. I think maybe then you only had to have 30 years' contributions or something...

Anyway, I checked again last year, and found I was 2 years "in deficit".

That small business sounds like a good idea would it still work if I made absolutely no money???

Dazed_and_C0nfused

Yes.  You have to register with HMRC as self employed (for tax and National Insurance) and if your business turnover is less than £1,000 then when you complete your Self Assessment return you could claim the Trading Allowance* so there would be no profit.

Then just fill in the bit of the return where you can say you want to pay voluntary Class 2 National Insurance despite having a profit less than the normal limit for needing to pay Class 2 NIC.

*you cannot claim this if the business is connected to an employment you have

xylophone

Yes thanks (don't get it for another year) - and, despite having been gully paid up, am now expected to cough a further £1500-odd to fully pay it up AGAIN..

Not exactly accurate.

You were "contracted out" of  SERPS when you worked for BT - this meant that you were not contributing through NI to the Additional (earnings related) State Pension but rather to your occupational pension.

This meant that you had the right to a Guaranteed Minimum Pension within your occupational pension.

This right to the GMP carried over into the S32.

At 6/4/16 two calculations were done for you.

NI years [up to 30] /£119.30 [full BSP 2016-17] + (Additional State Pension - Deduction for Contracting Out]

(NI years [up to 35]/£155.65 [full NSP 2016-17]) - Contracted Out Pension Equivalent.
Your "starting amount" was the higher of the two.

Your "starting amount" was lower than a full NSP - you therefore have the opportunity to increase up to full NSP by contributions or credits.

https://www.royallondon.com/siteassets/site-docs/media-centre/good-with-your-money-guides/gwymg-1b-topping-up-state-pension-2019-interactive.pdf

xylophone

This sorry tale began in 1993, when I (knowing nothing) was persuaded by an IFA to transfer my British Telecom pension (defined benefits, index linked, provision for dependents etc – more or less equivalent to a Civil Service pension) into a money purchase scheme with Scottish Equitable (now AEGON). I was told that the SE one would greatly outperform the BT one, I’d be able to retire at 50 etc etc.

In fact, the SE one performed miserably, not getting anywhere near even matching the BT one, never mind outperforming it spectacularly. I told the Ombudsman I felt I’d been given very bad advice, but got a kind of a “Meh – you knew what you were doing, it was your choice” in return.

See https://forums.moneysavingexpert.com/discussion/6064646/tax-position-re-pension-redress-offer#latest

where the poster says" My wife was poorly advised in 1993 and moved her final salary benefits to a private pension. Her employers have agreed the advice was unsuitable and have offered a gross redress amount of around £222,000". 

I wonder what made the difference?