Pension mis-selling advice

Thrugelmir

MrSpicy said:

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. 

Bear in mind. Annuity rates were far far higher a couple of decades ago. A very different era to that, that exists today. 

Keep_pedalling

MrSpicy said:

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.

Would she consider downsizing to free up equity and to cut down on running costs of what sounds like an old house with high maintenance costs?

xylophone

Has your mother heard from DWP concerning any possible increase to her state pension?

If your father had any additional state pension she could inherit up to 80% of it.

If she does not receive a full basic state pension in her own right but he did, she may be able to claim a full BSP on his contributions.

Re Pension Credit

https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs48_pension

Malthusian

Dazed_and_C0nfused said:

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.

The annuity provider should be able to confirm that to the executor with a phone call.

What the OP needs to look for is the paperwork leading up to the decision to take the annuity. If he used an adviser / intermediary there should be some sign of their involvement (this could have been at the turn of the millennium when things were less regulated, but if he received advice there should have been a letter documenting it). There should also be annuity quotes and retirement options from the annuity provider (which could easily also have been L&G, especially if this was non-advised). If his father threw nothing away there should be enough to build a picture of whether the father was advised to take a single life annuity or whether it was his own decision.

A phone call to the annuity provider will be able to confirm when the annuity started, and then the OP will know which year to skip to in his father's paperwork.

The consolation for the OP's mum is that if he'd bought a joint life annuity she would currently have less in savings. The higher annuity rate for a single life annuity means they have been building savings faster / draining them more slowly. (Or they would have had a lower standard of living up till now to preserve the same level of savings, but same difference.) 81 is not very old and he probably lost the gamble of buying a single life annuity, but not by too much.

Thrugelmir

Malthusian said:

Dazed_and_C0nfused said:

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.

81 is not very old and he probably lost the gamble of buying a single life annuity, but not by too much.

For someone born around 1940?  The NHS didn't even exist back then........

DaveMcG

xylophone said:

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?

The SIB at that time took the view that anyone leaving or not joining an employers' pension scheme and taking out a personal pension were advised by either an IFA or a tied representative of the pension company (ie they wouldn't entertain non-advised or execution only sales as a reason not to be liable for any loss).     

DaveMcG

If he was around 60 in the early 2000s and took early retirement, it seems likely that that the transfer out and the annuity purchase took place at around the same time as the review of pension mis-selling was taking place.  I can assure posters that  "at the turn of the millennium when things were less regulated" was most definitely not the case where pension transfers from public sector/ defined benefits were concerned.  The major life companies were paying out £100m's in redress and viewed such business as utterly toxic.  I would be utterly gobsmacked if L&G facilitated the transaction as non-advised and it is far more likely an IFA was involved - presumably L&G should be able to confirm this or the poster might be able to find paperwork.

xylophone

The SIB at that time took the view that anyone leaving or not joining an employers' pension scheme and taking out a personal pension were advised by either an IFA or a tied representative of the pension company (ie they wouldn't entertain non-advised or execution only sales as a reason not to be liable for any loss). 

That is interesting  - it would make the  insurer accepting the original DB pension responsible for any "mis sale"?

Alice_Holt

MrSpicy said:

... 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.

        There is not a savings limit at such which prevents eligibility for Pension Credit (PC).  Rather any savings over £10k are assumed to generate a "tariff income" which then reduces any PC payable.

         PC info: 
          https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs48_pension_credit_fcs.pdf

        PC calculator:
        https://www.gov.uk/pension-credit-calculator

DaveMcG

xylophone said:

The SIB at that time took the view that anyone leaving or not joining an employers' pension scheme and taking out a personal pension were advised by either an IFA or a tied representative of the pension company (ie they wouldn't entertain non-advised or execution only sales as a reason not to be liable for any loss). 

That is interesting  - it would make the  insurer accepting the original DB pension responsible for any "mis sale"?

Yes, if there was no IFA involved.  But as I discussed above, given the risk appetite of life companies for this kind of business at that time, it is highly unlikely they would have accepted a direct transfer.