Pension provider say they have paid me too much

WanderingSal

Can anyone help.  I took early retirement at 60 and received a final salary pension. I was not well off, but just managing. Now, 4 years later they say their pension calculations were totally wrong and I owe them thousands. They want to reclaim a 7 figure sum from me, plus reduce my pension by well over £2,000 per annum.  If they had given me the correct information of course, I would not have retired so early and I would have left the pension untouched for longer.  Their new figures will reduce me to near destitution.  I am not convinced they have got their sums right now. But their initial wrong information has directly led to me taking financial decisions that will have serous impact on the rest of my life.  I cannot  get hold of anyone at citizens advice despite holding on the phone for hours.  I am suicidal. Can anyone help?

The_Unready

A seven figure sum is over £1 million. Is that correct?

lisyloo

Did you use an advisor? or are you dealing directly with the pension company yourself.
Is it a private pension? SIPP? or a final salary scheme?
Can you tell us who the pension company are?

Don't panic.
If it's a proper pension company there will be an avenue for complaints.

Linton

Can you give us some numbers - in particular the pension you have been getting, the pension the provider thinks you should have been getting and the money the pension company wants you to pay back.

I cant see how a 7 figure reclaim can possibly arise from just 4 years incorrect pension payments.

molerat

Money Helper, used to be called The Pension Advisory Service, are likely to be very helpful in this scenario.  https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems
Unlikely the reduction in pension can be reversed but you may be able to get the clawback reduced.

Tommyjw

The unfortunate end result is they do have the power to reduce your pension to what it should be, and get the overpayment back, either by requesting it back immediately or reducing your pension accordingly until the overpayment is made up. See this linked Ombudsman example  where in summary an overpament was made and they recovered it be reducing the persons pension over a 10 year period. They also gave the member £1000 (typcially highest you may see) for the distress the issue has caused him.

In general, a rule of thumb the Ombudsman operate with is if you are financial distress to have you pay the overpayment back over a period at least equal to the period you were overpaid (so 4 years) but that doesnt mean you couldnt get it for much much longer, especially if the numbers are higher and your other income is low. 

That said there'd be a few extra thoughts to it 

1. Exhaust their complaints process and then go to ombudsman and provide evidence of your financial situation . At the very least this will delay any agreement to repay the overpayment back for a long while whilst that goes through (but your pension will have been reduced)
2. If you have any evidence you would not have retired if the figures were lower then provide it (i appreciate this is unlikely, but the complaints/Ombudsman process will simply say theres no evidence you wouldnt have gone ahead on the correct figures so if you do have anything)
3. Ask for a complete breakdown of what was wrong with the old calculation and right with the new one, you could always come here and tell us and people should be able to work it out
4. Unfortunately you could end the process no better off, still having to pay everything (minus a 'minor' compensation amount), but the Trustee can very easily offer to write off part of it especially if told in detail about any financial hardship.

WanderingSal

I meant a five figure sum. It's £11,000 reclaim, plus reducing the pension by about 2,500 per annum

WanderingSal

The provider is TPT retirement solutions. They are reclaiming £10,517 overpaid, plus reducing payment down to £9,300 (before any reduction to claw back the overpayment). They will not write to let me know the exact figures until April (i.e. after I start to receive the reduced sum). There is no reference in their letter to any complaints procedure or redress. I could have waited a few more years before retiring, or taken a smaller lump sum to increase the annual pension I receive. As I have made decisions based on the incorrect information they gave me, this is likely to leave me mucj poorer throughout my retirement.

dunstonh

 But their initial wrong information has directly led to me taking financial decisions that will have serous impact on the rest of my life. 

Sadly, there is no compensation for that as you have no legal entitlement to money were not entitled to.  It works both ways, if they had been short, they would have to pay the extra.   There is the possibility of a small goodwill gesture though. 

However, they have to give you a reasonable time period to repay the money.  A general guide is the number of years the error occurred is the number of years they should give you to repay it (i.e. 4 years of overpayments would be 4 years of monthly deductions to pay it back.

If it is going to leave you very short, then they can extend the repayment period but it has to be reasonable.  You wouldn't get away with 20 years for example.

If they had given me the correct information of course, I would not have retired so early and I would have left the pension untouched for longer. 

In which case, you return to work and that problem goes away.  Probably would only need to be part time now.

Marcon

WanderingSal said:

Can anyone help.  I took early retirement at 60 and received a final salary pension. I was not well off, but just managing. Now, 4 years later they say their pension calculations were totally wrong and I owe them thousands. They want to reclaim a 7 figure sum from me, plus reduce my pension by well over £2,000 per annum.  If they had given me the correct information of course, I would not have retired so early and I would have left the pension untouched for longer.  Their new figures will reduce me to near destitution.  I am not convinced they have got their sums right now. But their initial wrong information has directly led to me taking financial decisions that will have serous impact on the rest of my life.  I cannot  get hold of anyone at citizens advice despite holding on the phone for hours.  I am suicidal. Can anyone help?

There are some unhelpful and not wholly accurate comments above which given your state of mind I suggest you ignore.

If you demonstrate that you took irreversible decisions based on incorrect information, you may be able to successfully argue something known as a 'change of position' defence. The best people to help are, as already suggested, MoneyHelper, who will have seen this situation many times before. Their help is free, impartial and based on knowledge rather than surmise. That said, the outcome will depend on the exact facts of the case, so it's impossible to predict what will happen - but please get in touch with them as soon as possible.

born_again

WanderingSal said:

The provider is TPT retirement solutions. They are reclaiming £10,517 overpaid, plus reducing payment down to £9,300 (before any reduction to claw back the overpayment). They will not write to let me know the exact figures until April (i.e. after I start to receive the reduced sum). There is no reference in their letter to any complaints procedure or redress. I could have waited a few more years before retiring, or taken a smaller lump sum to increase the annual pension I receive. As I have made decisions based on the incorrect information they gave me, this is likely to leave me mucj poorer throughout my retirement.

Interesting they are not on the FCA register.

Complaints.

https://www.tpt.org.uk/contact-us#undefined

https://www.pensions-ombudsman.org.uk/