Clerical Medical Annuity payment decreased

Scotbot

My mother receives a monthly  annuity payment from Clerical Medical on the 5th of the month. She has done for years and it is around £250 to £260. In July she was sent an annual forecast saying the first payment would be £250. Clerical Medical made 2 payments in August and September but in October and November payment was made for only £20 by Scottish Widows . No correspondence has been sent

I have tried calling them but they won't speak to me until the LPA is registered with them which could take several weeks

Is this likely to be an error or could it really have dropped that much?

dunstonh

The most common reasons for this are:
1) tax code adjustment 
2) inherited annuity where the guarantee period has ended.

Errors are unusual but theoretically possible.

Clerical Medical were not active in the open market with annuities.  They only offered them for CM pensions.   If the pension was inherited then the non-protected rights may not have any spouse provision beyond the guarantee period but the former protected rights would continue when the guarantee period ends.

Is this pension originally hers or did it once belong to your father?

Scotbot

I don't know but assume it belonged to my father. He died in 1998

dunstonh

Scotbot said:

I don't know but assume it belonged to my father. He died in 1998

That would appear to rule out a guarantee period as the maximum allowed in 1998 was 10 years.   So, any guarantee would have expired long ago.

Tax is still a possibility.  Has your mum had any increase in income of late or taken any lump sums from another pension recently?   Or has she received notification of change in her tax code from HMRC?

DullGreyGuy

Scotbot said:

I don't know but assume it belonged to my father. He died in 1998

Guarantees are normally 5-10 years but there is no legal maximum and some have offered much longer. Had the annuity gone into payment by the time he died or was it still deferred then? The guarantee starts from when the payments start. 

Sounds like you need to dig out paperwork, get her to call and authorise them to speak to you or wait for the PoA

Scotbot

I doubt if is a change in tax code as she has not filed this years yax return yet. Her income has not gone up  and she does not have her own private pension. I don't have the original paperwork  and no idea when payments started so I guess I will have to wait

DullGreyGuy

Scotbot said:

I doubt if is a change in tax code as she has not filed this years yax return yet. Her income has not gone up  and she does not have her own private pension. I don't have the original paperwork  and no idea when payments started so I guess I will have to wait

Why she doing tax returns if she has one small private pension?

Scotbot

She has an  investment portfolio 

Scotbot

The change occurred when the payments started being paid by Scottish Widows which makes me think/ hope it is an error. I  will update the thread when I find out

Dazed_and_C0nfused

My mother receives a monthly annuity payment from Clerical Medical on the 5th of the month. She has done for years and it is around £250 to £260. In July she was sent an annual forecast saying the first payment would be £250. Clerical Medical made 2 payments in August and September but in October and November payment was made for only £20 by Scottish Widows . No correspondence has been sent

99.99% this isn't all down to tax.  The pension companies payroll software will have a safeguard in place to ensure that the maximum tax deduction is 50% of the monthly (taxable) pension payment.

xylophone

The change occurred when the payments started being paid by Scottish Widows which makes me think/ hope it is an error. I  will update the thread when I find out

See 

https://forums.moneysavingexpert.com/discussion/6547101/clerical-medical-scottish-widows-pension-payment-problem-and-br-tax