Clerical Medical (? Scottish Widows) Pension Payment Problem and BR Tax.

[Deleted User]

I know this is quite a long post but I hope you don't mind reading it as I do my best to explain.  

I have been receiving a small monthly pension from Clerical Medical continuously every month directly into my bank account, net with Basic Rate tax being taken off, since 1998.  Until now there has never been a problem and I hope someone here may have information regarding what the problem could be.

I'll try to be brief and I'll be grateful for any insight.  My pension was not paid into my bank accoun when it was due on Friday 9 August.  I'll have to 'phone Clerical Medical again but I'm dreading it.  When I 'phoned the number on my previous payment advice notices they had no record of my Pension.  I checked every number I had access to on my previous Payment Advice Notices and from when my Pension commenced in 1998 and provided them.  I was asked for full details including name, date of birth address and if I had changed my bank account - which I had not  I was asked for my National Insurance Number and if my Pension was with Clerical Medical or Scottish Widows.  It has always been with Clerical Medical.  They had no trace of my Pension and, with the absence of this month's payment, I was worried about it.

One of the options I was given was to wait to see if the payment arrived or telephone a different number for Annuities which they provided.  When I telephoned the Annuities Department they needed an Annuity Number which I did not have.  I checked all my paperwork from 1998 and there was no Annuity Number.  They did not recognize the Account Number on my Payment of Advice notices.  

They said they would send an Annuity Number to me by post - I think I was told it would arrive in about 20 days and, when I asked, they were not allowed to provide it by telephone.

Early this morning a gross payment arrived in my bank account from, for the first time ever, Scottish Widows.  It is a gross payment (20% more than my usual net payment) and looks as if no tax has been taken off.  It is a BCG but there is no reference number.  For the first time ever no payment advice for August has arrived - nothing from Clerical Medical or Scottish Widows.

I am anxious about the prospect of making another telephone call - especially since I do not have the annuity number they require.  I can see that something has gone wrong but I don't understand what is happening.  The third person I spoke to on Friday said they had a new computer system and I wonder if it is related to that. 

Although it is not a lot of money I'm concerned about "messing up" my tax as I must owe Inland Revenue a small amount of tax as I know I am not eligible to receive a gross payment.  My tax notification from HMRC says "BR" (=20%) tax deducted from my Clerical Medical Pension and this has happened all along until now. I have had no prior notification of a change in my pension payment from Clerical Medical or from Scottish Widows.

In advance of telephoning Clerical Medical again, if anyone knows what might be happening I'll be most grateful, thank you.

dunstonh

 I can see that something has gone wrong but I don't understand what is happening.

I am not sure anything has gone wrong from what you describe.   

 I have had no prior notification of a change in my pension payment from Clerical Medical or from Scottish Widows.

Have you moved house in the time you set the annuity up and today?
A lot of people forget to notify their annuity providers when they do as they no longer get statements like they did when they held the pension.

Communications have been sent out notifying of the changes but if you haven't had anything and they cannot find you with your address, then it hints at the possibility that they do not hold your current address.

In advance of telephoning Clerical Medical again, if anyone knows what might be happening I'll be most grateful, thank you.

Lloyds Bank owns Clerical Medical and Scottish Widows.    Whilst the still use the old CM branding (although sometimes CM policyholders get SW letterheads), the admin is controlled in the same location as SW.      CM is now a trading style of SW rather than a separate company.   The plan is to phase out the CM brand.

It sounds like you have moved onto the new SW system under SW and that will use a different PAYE code to the old CM system.

Although it is not a lot of money I'm concerned about "messing up" my tax as I must owe Inland Revenue a small amount of tax as I know I am not eligible to receive a gross payment.  My tax notification from HMRC says "BR" (=20%) tax deducted from my Clerical Medical Pension and this has happened all along until now. I have had no prior notification of a change in my pension payment from Clerical Medical or from Scottish Widows.

HMRC will inform SW of the tax code to use from month 2, and it should correct itself over the remainder of the tax year.

[Deleted User]

Thanks very much for replying, dunstonh.  I really appreciate the time you have taken for such a detailed reply to my long post.

When I moved house over four years ago I wrote to Clerical Medical informing them and I have their written confirmation of the change of address.   My Pension payment advice statements, until now, always come to my correct home address.  I don't have any other address and it is the address HMRC have for me - where they sent my BR tax code for Clerical Medical.

Since 1998 all my small monthly payments have always been paid net of tax.  As you  explain and, if I have been transferred to Scottish Widows, maybe I will receive a different tax code from a different tax office.  On my 1998 Clerical Medical documentation it says that tax will be deducted from my pension payment at source.  This month, for the first time since 1998, my pension payment was late going into my bank account ,was from Scottish Widows, paid gross and with no reference to refer to - just Bank Transfer.

Maybe some communication will come in my post today (sometimes post does not come until 1 or 2 p.m.)

As I said, I really appreciate your detailed reply and I'll post back:  If a letter comes today informing me of the change and, if not, if I manage to speak to the person (telephone number given by Clerical Medical) for the Annuity Department.

It was worrying when Clerical medical said they had no record of my Pension.

xylophone

To me this looks like incompetence on the part of the provider.

It is ridiculous that you should have been fobbed off and told that there is no trace of a pension that you have been receiving for over a quarter of a century.

In your place I would be making a complaint in writing.

https://www.clericalmedical.co.uk/making-a-complaint.html

dunstonh

Since 1998 all my small monthly payments have always been paid net of tax.  As you  explain and, if I have been transferred to Scottish Widows, maybe I will receive a different tax code from a different tax office.  On my 1998 Clerical Medical documentation it says that tax will be deducted from my pension payment at source.  This month, for the first time since 1998, my pension payment was late going into my bank account and was from Scottish Widows with no reference to refer to - just Bank Transfer.

CM and SW used to have separate payrolls. When you move from one payroll to another, it's like starting again. They have been consolidating so much of CM into SW very slowly. They started around 15 years ago and still haven't finished.

Moving to a new payroll is just one explanation.   Whilst the consolidation is in stages, they may have just changed the source bank account from CM to SW and it may just be an account name change.

But the key thing is, that CM merging into SW is fine and its likely to just be a short blip before normality returns.

[Deleted User]

Thanks xylophone.  It's good of you to include the link.  I hope so much that I don't need to complain formally.  I think the communication is poor and, to some extent, a bit disconcerting.  I'm hoping it will be sorted today and I'll be glad to know exactly what has happened.

As you see, dunstonh has been very helpful and has thrown a good amount of light on what is likely to have been going on.  Although I now feel sure that my small (but very important to me) Clerical Medical Pension is safe I really was worried when Clerical Medical said they had no trace of it.  At that point not payment had arrived in my bank account and it had never been missing or late since 1998.

I'm eager not to have my tax 'upset' and would have felt better if I had, as would have been normal, paid net of tax as previously.  Nothing was mentioned during the two telephone calls about a change to Scottish Widows.  The only 'thing' was that they had a new computer system.

I'll post back once I have confirmation about what has been happening and I appreciate your interest, also dunstonh, for replying.  Thank you.

UPDATE at 12.10 p.m.  Post has come and there is nothing from Clerical Medical or Scottish Widoes.  I'll have to 'phone them again - but later.  The lack of communication is disappointing.   Thank you again for your replies - helpful and very much appreciated..

xylophone

But the key thing is, that CM merging into SW is fine and its likely to just be a short blip before normality returns.

But that is not the point, is it?

The point is the total incompetence shown by their operatives and the lack of customer care.

https://forums.moneysavingexpert.com/discussion/6491638/clerical-medical-extremely-poor-service

In the OP's place I would be making a formal complaint.

[Deleted User]

Hopefully things are now in hand to address the problems.  I telephoned Clerical Medical and was transferred to their Annuities Department - Scottish Widows.  The gentleman listened patiently to the things/issues/ lack of advance notice or communication and missing Advice of Payment notice etc. 

He apologized, said that others from Clerical Medical experiencing the same issues/problems/concerns had also telephoned.  He would be referring to the appropriate Department to address the issues I raised. I said, politely, that I was disappointed about the absence of advance notification and some of the changes which will take place going forward.

He is going to arrange for an August Advice of Payment to be sent to me and will speak to the appropriate Department about my BR tax code - so 20% tax will be taken off.

Although it was not his personal responsibility his apology seemed genuine and he did his best to be helpful.

[Deleted User]

Update today:  The amount of tax deduction for the August 2024 payment (20%) should have been £4.40.  Clerical Medical are looking into my "concerns" and I have heard nothing more.

Today my payment for 11 September arrived in my bank from Scottish Widows with the net amount £19.12 as a BGC.  

Later a faster payment arrived from "CITY OFFICE" for £4.60 - the amount of tax, ? coincidence, I should have had deducted in August.  There is no indication regarding who "CITY OFFICE" is or why the payment has been made.

I reeceived no monthly advice of payment for August - so that is two now missing.  I'm not sure what to make of this.  I know I could telephone Clerical Medical or Scottish Widows.

It seems to be very disorganized and, so far, I still have received no proper information about this changes.

Until I can find out from Clerical Medical or Scottish Widows, I wonder if anyone here has any ideas about the reason for this unexpected faster payment from "CITY OFFICE."  Thank you.

[Deleted User]

UPDATE 12 September 2024.  I contacted my bank who were able to confirm that the Faster Payment "CITY OFFICE" was from Lloyds Bank and related to Scottish Widows.  Although there has been no further contact or information from Clerical Medical or Scottish Widows I am pleased to know that the £4.80 is from Scottish Widows.

It must be Tax related but hope to find out more in due course.

[Deleted User]

UPDATE  Problem solved.  All documentation is up to date and I have received the "missing" Payment Advice notices.  My Pension is still with Clerical Medical and the problem seems to be related to a change in their banking system. 

Everything is O.K. with HMRC so I have nothing to worry about there. 

All sorted now so I'm relieved and pleased.

Thank you, all, very much for the helpful replies.