Pension mis-selling advice

MrSpicy

My Dad sadly died a few months ago. Yesterday, we found out his pension didn't include a widow's pension to provide for my Mum after his death, so she now founds herself with an extremely limited income.
Dad was a teacher (independent school) - at some point (I think in the 90's) he transferred out of the offical Teacher's Pension Scheme to a private Legal & General pension. It would appear that this new pension didn't include provision for Mum, his now widow. It seems impossible that he would have knowingly done this - he was extremely careful with his money, and planning for the future - and making sure Mum would be OK should something happen to him. I suspect he was mis-sold this pension.

Would appreciate any advice on how we might be able to chase this and possibly get some financial assistance for my Mum.

QrizB

I take it that your Dad was retired, and had used his L&G pension fund to buy an annuity?

I could be completely wrong on this, but the mistake (possibly mis-selling, possibly not) could have been when he chose the annuity, not necessarily when he transferred out of TPS.

tacpot12

Is there money left in the L&G Pension? If so, the trustees of the scheme should be able to release the remaining money to your Mum in the form of a pension. If all the money has been withdrawn and spent, then your Dad has left your Mum in this situation. If all the money has been withdrawn and used to buy an Annuity, you need to find out who advised him about the Annuity. An IFA would normally question any purchase that did not provide for a spouse.

Have you looked into whether your Mum would be eligible for Pension Credit? If so, it would be worth applying for this, as it can passport her to a number of other useful benefits. 

Thrugelmir

MrSpicy said:

I suspect he was mis-sold this pension.

Unfortunately you've no grounds to suspect unless you've hard evidence to support your claim. Your late fathers reasoning will never be known. 

Malthusian

Dad was a teacher (independent school) - at some point (I think in the 90's) he transferred out of the offical Teacher's Pension Scheme to a private Legal & General pension. It would appear that this new pension didn't include provision for Mum, his now widow.

As others have said, the transfer to the private L&G pension (I am assuming it was a defined contribution plan) was not the problem. (It could easily have been missold but that would not be the reason she now can't benefit from the pension.) If he'd died still holding it, it would generally have paid 100% of the fund value tax-free (if death was pre-75) to her or other nominated beneficiaries.

The most likely scenario is that he exchanged it for a single-life annuity and you will need to investigate the circumstances before making any assumptions about misselling. There was nothing stopping him doing that entirely off his own bat, with no advice. Unfortunately it is not unknown for people to opt for single life annuities because they paid higher income without bothering to think about provision for their spouse, and for their widow to only find out on their death.

It would be worth posting on the Benefits Forum to find out if your mum is eligible for any assistance - posters there have more specialist knowledge in this area.

Silvertabby

Sadly, I've seen this happen before with ex LGPS.  Transfer out to a private scheme in order to access pension benefits before 60, and 'automatically assume' that all pensions come with survivor's benefits.

Then, when given the choice of which annuity to take, the pensioner believes they are doing the right thing by taking the highest possible income.

It is possible that your dad didn't take independant financial advice before selecting his annuity because he didn't think he needed it.  Did he keep the paperwork?  If he did, then it may throw some light on the matter. 

DaveMcG

If he opted out of the teachers scheme in the early 90s, he should have had his pension advice about this decision reviewed by the pensions mis-selling review of the late 90s, early 2000s.  It is almost impossible that the advice to leave the teachers' scheme would have been appropriate.  The normal form of redress would have been reinstatement in the teachers' scheme and he would have had to re-join the scheme for this to happen.  As he doesn't appear to have done this, it is unlikely he would have received any redress and it might be worthwhile for his executors to enquire about the circumstances surrounding the mis-selling review and his decision.

As others have pointed out, the decision to buy an annuity without widow's benefit (if that is what happened) is separate from the above, but still worthwhile enquiring about the advice relating to that decision as the FCA has found some annuity advice to be deficient.  

xylophone

In the nineties,  there would have been no compulsion to  consult an FA on transferring his DB pension to L&G - he might also not have taken advice on the retirement product he purchased with his L&G pension?

xylophone

My Dad sadly died a few months ago.

How old was he?

And your mother?

MrSpicy

Thanks for all your useful comments. Right now, I don't have much information. I'm going over to Mum's tomorrow so I can try and find all the related paperwork and work out what happened and when. Dad never threw any paperwork away - so there'll be lots to look through, but hopefully should find some useful information.
Dad took early retirement, and I suspect the change of pension may have been related to attempting to get the best pension he could in those circumstances. I don't believe he would have knowingly deprived Mum of a widows pension - he made much effort to make sure money was saved for both of them for the future. I know he did make use of FA/IFA at some times, but as of now, I have no idea who.
Dad was 81 when he died, Mum is 78. I'm not sure she will be eligible for Pension Credits as currently she has some savings (although much of that is going through probate at the moment). She will have a number of big bills coming up over the next 12 months (the central heating will need a major update and the roof needs to be retiled), so the savings will diminish significantly by the end of last year. I will need to investigate at what point she'd become eligible for Pension Credits.

Dazed_and_C0nfused

If he spent his pension fund on buying an annuity then hopefully there will be paperwork showing the option he took and if it was single or joint life.