Pension Company Quotation

Phil114

I retired early in Sept 23. In February 23, I asked for a quotation benefit statement which stated I was entitled to circa £20k per year (capital value approx £415k).  Based on this, I decided to retire early and left my job at the end of August 23.  However, when I received the final settlement figure in mid September, it had been reduced to circa £13.5k (no capital value stated).   I was divorced in 2020 and accept I lost 40% but have a letter (from March 2020) stating value pre divorce was £640k and with all reductions were put in place and the new value of benefits then was circa £406k.  I am now at a loss as the company are stating that the quote in Feb 23 DID NOT include the pension sharing order deductions.  Do I have any recourse here?  I am obviously far worse off than expected but the pension company are adamant they have the final number right even though its drastically different from the quoted value.  Any information received with grateful thanks.

Albermarle

It is not clear from your post whether you are talking about a Defined Benefit /Final salary type pension where there is a guaranteed annual pension based on years of employment and salary.
Or do you mean a Defined Contribution pension where there is just a pot of money ( maybe with an estimate of what level of pension it may or may not generate) .?

Marcon

Phil114 said:

I retired early in Sept 23. In February 23, I asked for a quotation benefit statement which stated I was entitled to circa £20k per year (capital value approx £415k).  Based on this, I decided to retire early and left my job at the end of August 23.  However, when I received the final settlement figure in mid September, it had been reduced to circa £13.5k (no capital value stated).   I was divorced in 2020 and accept I lost 40% but have a letter (from March 2020) stating value pre divorce was £640k and with all reductions were put in place and the new value of benefits then was circa £406k.  I am now at a loss as the company are stating that the quote in Feb 23 DID NOT include the pension sharing order deductions.  Do I have any recourse here?  I am obviously far worse off than expected but the pension company are adamant they have the final number right even though its drastically different from the quoted value.  Any information received with grateful thanks.

A mistake in a quotation doesn't entitle you to higher benefits than those to which you are entitled under the rules of your scheme (the principle is known as 'unjust enrichment').

It's extremely difficult to argue successfully that you should be provided with 'better benefits' on the basis of a mistake, even if you can prove something known as 'change of position' (you've irrevocably altered your situation on the basis of incorrect information, which you could not have realised was incorrect).

At best, you may be able to claim a modest amount (typically £500 or so) of compensation for distress and disappointment - and I can fully understand that you will have suffered both. This sort of error really is a nightmare for members.

dunstonh

Do I have any recourse here?

No.   I had a similar scenario a long time back and it ended up with the ombudsman who agreed with the pension firm that an error did not give any entitlement and that the pension holder should have reasonably been able to see that the reduction didn't occur.  it awarded a few hundred pounds for the inconvenience.   In that case, the person retired before getting the pension commencement figures as they too relied on a projection.  They also moved house to a different area.

Effectively, you haven't lost out because you never had that entitlement.  

 I was divorced in 2020 and accept I lost 40% but have a letter (from March 2020) stating value pre divorce was £640k and with all reductions were put in place and the new value of benefits then was circa £406k.  I am now at a loss as the company are stating that the quote in Feb 23 DID NOT include the pension sharing order deductions.

You appear to be looking at CETVs.  However, the CETV is irrelevant when you are taking the scheme pension.

I am obviously far worse off than expected but the pension company are adamant they have the final number right even though its drastically different from the quoted value. 

They are correct.

And I have assumed DB despite your references to values as a DC pension would give you a wide range of income options that you get to choose.