Pension fund companies practices when you cash in your pension

bigjonmitchell

Dunstonh your are not being helpful 

Scottish widows wording does state a specific amount for the lump sum but not the pension itself but it also said none of the figures are guaranteed which is a bit of a cop out.  It also states the following.  

Thank you for contacting Scottish Widows.

 

I’d like to clarify that while the requested claim date was 22/04/2025, we were unable to use this date due to ongoing contributions being processed at the time. As a result, we proceeded with the next available date—23/04/2025—once all transactions had cleared. However, the policy has been backdated to the originally requested claim date, which has led to the discrepancy you noticed.

 There were no transactions happening on my pension pot as it was a plan from a company that no longer was using Scottish widows as the workplace pension provider. The ´claim’ was made on April 22. The lump sum arrived on 4th June. If the pot have reduced in value below the quoted numbers then I would have had a reduced amount. As it happens the amount received was slightly higher than the quoted figures but about 3k less in pension fund value than the actual value of the pension on the 3/4th June.  So someone’s pocketed the money. 

bigjonmitchell

And I did not agree any £3k fee or anything like that. The sum of the amount they are buying the annuity with plus the cash lump sum amounts to a deficit of about £3k. 

Marcon

bigjonmitchell said:

Dunstonh your are not being helpful 

Scottish widows wording does state a specific amount for the lump sum but not the pension itself but it also said none of the figures are guaranteed which is a bit of a cop out.  It also states the following.  

Thank you for contacting Scottish Widows.

 

I’d like to clarify that while the requested claim date was 22/04/2025, we were unable to use this date due to ongoing contributions being processed at the time. As a result, we proceeded with the next available date—23/04/2025—once all transactions had cleared. However, the policy has been backdated to the originally requested claim date, which has led to the discrepancy you noticed.

 There were no transactions happening on my pension pot as it was a plan from a company that no longer was using Scottish widows as the workplace pension provider. The ´claim’ was made on April 22. The lump sum arrived on 4th June. If the pot have reduced in value below the quoted numbers then I would have had a reduced amount. As it happens the amount received was slightly higher than the quoted figures but about 3k less in pension fund value than the actual value of the pension on the 3/4th June.  So someone’s pocketed the money. 

I appreciate you are feeling thoroughly grumpy about what's happened to you. That's coming over loud and clear!

Just because someone is saying something you don't like doesn't mean they are not being helpful. They are - but sometimes it can be an uphill struggle when someone doesn't want to know...or isn't reading sufficiently carefully to understand what is being said.

As for annuities not being an insurance product - that'll come as news to the insurance industry and the FSCS (who class them as 'long term insurance products', which is why they have 100% FSCS protection with no upper limit).

Marcon

bigjonmitchell said:

An annuity is nothing to do with insurance. Your don’t pay a premium and the amount you get when you ask for it doesn’t go to zero because you stopped paying the premium.   So the term ´claim’ is inappropriate when referring to your pension that you pay into from your money. Definition of annuity is 

annuity /ə-noo͞′ĭ-tē, ə-nyoo͞′-/

noun

1. The annual payment of an allowance or income. 
2. The right to receive this payment or the obligation to make this payment. 
3. A contract or agreement by which one receives fixed payments on an investment for a lifetime or for a specified number of years.

Note the complete lack of mention of the insurance industry in this 

You're looking up the wrong definition. Look at the definition of claim:

https://www.merriam-webster.com/dictionary/claim

Fits annuities perfectly!

bigjonmitchell

Well as I don’t actually have my annuity at the moment the point you make is somewhat irrelevant.  I had to phone up and complain just to get them to spit out a chaps payment for a 25% lump sum that didn’t make any sense. Then I find after they process the payment there is still some money in my pension pot.  The whole think looks funky 

DRS1

 In the last week, Just, Standard Life and L&G have lowered their annuity rates.    Two of them quite substantially.

Oh great.

OP I think you will find that the pension provider will have a calculation date for deciding how much they pay to the annuity provider for the annuity and to you as the lump sum.  You may be able to see a value for your pension after that calculation date on the pension provider's web site but that doesn't mean you will get what you can see.  You get what they fixed on the calculation date.

I deduce this because when I was buying an annuity last year I got some late payment interest when they only paid in late August something they had calculated and should have paid in late July.  Certainly the total of what was paid was not what was showing on the web page as the "current" value for the pension on the days in August when I was checking.

This was not Scottish Widows by the way.

bigjonmitchell

Well all I can say when I claimed my pension they kept going on about how the value may go up or down.  So I’m at a loss as to what to think. As I said earlier I has to ring up and complain about it. I rang up
over a five week period and got nothing in terms of information until 30th may when I was contacted and told that people had told to resolve this issue by either Tuesday 3rd June or at latest Wednesday 4th June. The lump arrived by late Wednesday afternoon.  In the quotation their were no mention of any fees and I did not agree to any fees.   

DRS1

My annuity took 4 months to sort out last year (so 5 weeks is nothing) and yes I did spend a lot of time on the phone.  It didn't make them move any faster so you are clearly better at complaining than I am.

If you are getting an annuity then I would have expected the payment of the lump sum to be made at the same time as they pay the annuity provider.  So I would have expected the pension to have disappeared from the web page - that is certainly what happened to mine.  Or at least to be showing no value.

Is the annuity with Scottish Widows or someone else?   You may find the bumpf that they send with the quote or in advance of it) says something about charges (like we don't take charges from your income) but there will have been an allowance for commission in the basic quote.  You just won't see it until quite late in the day (if at all).  Any quote you get for an annuity from any other provider will also have the commission factored in (though I believe @dunstonh will tell you you can get a commission free quote if you go via an IFA (in which case you'd be paying the IFA a fee)).

bigjonmitchell

Well as I said beforehand. I haven’t got an annuity yet. Just a lump sum.  I have had no notice of how the annuity is set up or what I will receive.  

MeteredOut

bigjonmitchell said:

Well as I said beforehand. I haven’t got an annuity yet. Just a lump sum.  I have had no notice of how the annuity is set up or what I will receive.  

In that case, do you not think your claim of someone pocketing £3,000 of your money is a bit premature?