Pension payout by mistake?

neil7462

Not sure if this is a scam or true.
I assisted a person who had lost her husband with a pension pay-out that she was unaware of and she successfully received it last year. She got a lump sum and receives a monthly income for life.
They had contacted her about it as she wasn't aware of it until then, this was march 2024 and has been receiving an income since, she also received a lump sum of over £15000 as he died in 2020, so it was backdated. She has now received a letter to say her husband wasnt in the pension scheme and they will contact her to get the money back! She has paid some of her mortgage off with it so no longer has the money available. Any thoughts would be welcome thank you

Exodi

If you're uncertain about the letter, I would contact the pension provider directly and ask them (not on the contact details on the letter!).

I'd be incredibly surprised a pension provider would 'accidentally' pay out tens of thousands of pounds for over a year without confirming he was a member of the scheme... but stranger things have happened I guess?

If genuine, a mistake this gargantuan you'd expect them to be very flexible in working to retrieve any overpayment. 

Albermarle

Pension providers do make mistakes, but it is usually that they have calculated the wrong amounts, not that they have paid out to someone apparently not even in the scheme.
As above first contact them directly and find out if the letter is real or not.
If it is and they made an horrendous blunder, then there will have to be some sort of compromise. They may need to pay a professional to help them.
However the fact they initiated the situation by contacting the person involved, puts them in a weak negotiating position, especially regarding the lump sum.

Marcon

Exodi said:

I'd be incredibly surprised a pension provider would 'accidentally' pay out tens of thousands of pounds for over a year without confirming he was a member of the scheme... but stranger things have happened I guess?

I wouldn't. It happens when an administrator is too lazy or too poorly trained to carry out the correct checks, the most basic of which is the unique identifier: the NI number. Too often there is reliance on name and DOB, which might (accidentally) be fine if you're called Fabian Fluffkin and were born on 29 February, but not quite so useful if you're called John Smith and were born on a more 'regular' day of the year.

It's highly likely the Pensions Ombudsman would treat this in the same way as any other mistake, so have a look at https://www.pensions-ombudsman.org.uk/faq/question-14

OP - just to reiterate what others have already said: check the validity of this letter, using contact details from previous correspondence your friend has received, and/or looking online. Also reassure your friend, who must be worried sick, that they are in a good position to negotiate a timeframe for any repayment - their home is NOT at risk.

neil7462

Thank you all for your comments very much appreciated.
Just to add the pension company is Sopre Steria Capita.
When I googled the company they have had a data breach in 2023, so not sure if this has anything to do with this.
 I am going to make sure she doesn't do anything before everything is checked and verified.
I personally think this is a scam, and will need advice how to report this in the future
many thanks

Marcon

The scheme has independent professional trustees, so I'd start by contacting one of those - details here (they're the corporate trustees listed at the end): https://find-and-update.company-information.service.gov.uk/company/12430851/officers

neil7462

Just an update about my friends pension, she received exactly the same letter the following day. We tried to ring the company, but she failed the security question when asked for her date of birth, this is odd as we sent a copy of her birth certificate when we asked to send various documents. It is also marked clearly on the paperwork that they sent to fill in. So we have got to send that in before anyone will talk about the letter asking for the money back.
I have sent 2 emails but they can take up to 20 days to reply. The letter states that the monthly payments will stop, so her next one is due on the 1st Aug so I guess we will know for sure by then if it a scam or not. I did manage to have a conversation with someone at the company and I just asked if they had had anything like this before and they hadn't. They obviously didn't have my friends name.
Thank you for reading and any more comments would be appreciated.

Marcon

neil7462 said:

Just an update about my friends pension, she received exactly the same letter the following day. We tried to ring the company, but she failed the security question when asked for her date of birth, this is odd as we sent a copy of her birth certificate when we asked to send various documents. It is also marked clearly on the paperwork that they sent to fill in. So we have got to send that in before anyone will talk about the letter asking for the money back.
I have sent 2 emails but they can take up to 20 days to reply. The letter states that the monthly payments will stop, so her next one is due on the 1st Aug so I guess we will know for sure by then if it a scam or not. I did manage to have a conversation with someone at the company and I just asked if they had had anything like this before and they hadn't. They obviously didn't have my friends name.
Thank you for reading and any more comments would be appreciated.

Have you contacted the trustees as suggested in my post above?

doodling

Hi,

I wouldn't worry about being able to talk on the phone as it is probably in your interests for all communication to be in writing in any event.

Your covering letter for the birth certificate should observe that their records appear to have become incorrect since the pension came into payment and therefore their plan to stop payment may be based on incorrect data.

leosayer

I'm afraid it doesn't look good for your friend as she seemingly accepted a pension and lump sum without knowing if she was entitled to it.

Did she do anything last year to confirm where the pension was from seeing as it appeared to have come out of the blue?

Is there any evidence from before her husband's death eg. pension payments on bank statements or pension-related post or emails? 

Scam or not, your friend should not pay any money until she is damn sure that the request is 100% genuine and that she has exhausted all avenues regarding any hardship that she might face.

Under the circumstances I would hope the pension admin would tread very carefully here given that they created the problem and that this is a spouse's pension. I'm not sure I know what my wife was up to before we got together!

Marcon

leosayer said:

I'm afraid it doesn't look good for your friend as she seemingly accepted a pension and lump sum without knowing if she was entitled to it.

It's for the pension scheme to check benefits are being paid to the correct person, not vice versa! OP says they 'assisted' her so hopefully they knew what they were doing.

leosayer said:

Scam or not, your friend should not pay any money until she is damn sure that the request is 100% genuine and that she has exhausted all avenues regarding any hardship that she might face.

Pension schemes aren't hardship funds. The lady concerned has limited options if this does turn out to be a major mistake, since paying off her mortgage is spending she would have incurred whether or not she had this money. Receipt of it simply meant she paid off more of the mortgage more quickly - but that doesn't mean she has to make repayment (if that turns out to be the case) at a rate she finds unaffordable.

leosayer said:

Under the circumstances I would hope the pension admin would tread very carefully here given that they created the problem and that this is a spouse's pension. 

Not for the administrators to call the shots - it's trustees who make decisions, which is why it is so important they know about this episode, whether scam or mistake.