Pension Muck up by Scottish Widows!

Duggz

To put this as short as I can; 

I recently requested a transfer of a smallish pension pot of £4137 from my Scottish Widows old work pension, to my Hargreaves Lansdown SIPP. 

I filled out all the forms, and in those forms were the Scottish Widows and HL account numbers.

After some time, I noticed £4137 paid into my Bank account- with no communication of any kind from Scottish Widows as to why but, trusting their financial expertise, I presumed they’d returned the money to me as it couldn’t go to my HL account for whatever reason. 

I am not rich, £4137 is a lot of money to me, so I thought i’d use MY money wisely- I paid off a loan, and a Halfords purchase account, and the rest off my credit card- so not to waste the money and use it wisely. Bearing in mind, I know this is my money as it’s the amount I’d mentioned. 

Forward a week after this, I get a email from scottish widows telling me I have to pay this money back to them!! I can’t because I used it (my money is add so I had no reason to think I was doing anything wrong!) to pay those bills off I mentioned above.

They have now threatened to charge me some kind of unauthorised payment thing, the thing is- Ive now realised I didn’t even give them my bank details so I am now puzzled as to why they sent it to me if that was not what they were intending to do!!

What do I do? I’ve now not got the money and I did nothing wrong!! 

HELP!!

I’m worried sick now, I have about £100 in my bank which is why I paid those bills off as a sensible thing to do- and they are now threatening me, that I’ve got pay my own money back to them!! 

I’m a father of four, I work full time on nights driving a lorry, and I have no way to pay back this which is my own money- which is the most surreal situation caused solely by Scottish Widows mishandling of my money! 

Thank you for any advice or help,

Dazed_and_C0nfused

Duggz said:

To put this as short as I can; 

I recently requested a transfer of a smallish pension pot of £4137 from my Scottish Widows old work pension, to my Hargreaves Lansdown SIPP. 

I filled out all the forms, and in those forms were the Scottish Widows and HL account numbers.

After some time, I noticed £4137 paid into my Bank account- with no communication of any kind from Scottish Widows as to why but, trusting their financial expertise, I presumed they’d returned the money to me as it couldn’t go to my HL account for whatever reason. 

I am not rich, £4137 is a lot of money to me, so I thought i’d use MY money wisely- I paid off a loan, and a Halfords purchase account, and the rest off my credit card- so not to waste the money and use it wisely. Bearing in mind, I know this is my money as it’s the amount I’d mentioned. 

Forward a week after this, I get a email from scottish widows telling me I have to pay this money back to them!! I can’t because I used it (my money is add so I had no reason to think I was doing anything wrong!) to pay those bills off I mentioned above.

They have now threatened to charge me some kind of unauthorised payment thing, the thing is- Ive now realised I didn’t even give them my bank details so I am now puzzled as to why they sent it to me if that was not what they were intending to do!!

What do I do? I’ve now not got the money and I did nothing wrong!! 

HELP!!

I’m worried sick now, I have about £100 in my bank which is why I paid those bills off as a sensible thing to do- and they are now threatening me, that I’ve got pay my own money back to them!! 

I’m a father of four, I work full time on nights driving a lorry, and I have no way to pay back this which is my own money- which is the most surreal situation caused solely by Scottish Widows mishandling of my money! 

Thank you for any advice or help,

I don't think you can solely blame SW for this.

Are you even old enough to take money out of a pension 🤔

dunstonh

I filled out all the forms, and in those forms were the Scottish Widows and HL account numbers.

Scottish Widows and HL use the Origo transfer system.   So, there would be no SW forms to complete.  Only HL forms.  HL would tell SW the bank details to use.

So, it would be interesting to know what SW forms you think you filled in.     In the old days, there were discharge forms, but neither HL nor SW needed those and haven't for over 15 years.   You didn't by any chance fill in obsolete forms and put your bank details in where HL should have put theirs?

Or perhaps did you fill out open market option forms by mistake?   How much is the value of your pension?
open market option would have seen SW pay the TFC out.

I’m a father of four, I work full time on nights driving a lorry, and I have no way to pay back this which is my own money- which is the most surreal situation caused solely by Scottish Widows mishandling of my money! 

It is not your money until you are old enough to collect it.  Until then, it is under a trust which you cannot access.

After some time, I noticed £4137 paid into my Bank account- with no communication of any kind from Scottish Widows as to why but, trusting their financial expertise, I presumed they’d returned the money to me as it couldn’t go to my HL account for whatever reason. 
<snip>

I am not rich, £4137 is a lot of money to me, so I thought i’d use MY money wisely- I paid off a loan, and a Halfords purchase account, and the rest off my credit card- so not to waste the money and use it wisely. Bearing in mind, I know this is my money as it’s the amount I’d mentioned. 

That is not good enough to pass the reasonable expectation test to benefit from a mistake.  i.e. you had no reasonable expectation for this money.   You also made no attempt to find out why you had received it.    You spent it on a whim, and you don't get to keep it.    Nothing you did was wise.

They have now threatened to charge me some kind of unauthorised payment thing, the thing is- Ive now realised I didn’t even give them my bank details so I am now puzzled as to why they sent it to me if that was not what they were intending to do!!

There is no threat.  It is a reality. It is HMRC that charge this.  It's 55% of the amount of the unauthorised payment.

I’m a father of four, I work full time on nights driving a lorry, and I have no way to pay back this which is my own money- which is the most surreal situation caused solely by Scottish Widows mishandling of my money! 
<snip>

What do I do? I’ve now not got the money and I did nothing wrong!! 

You did lots wrong.   Spending money you didn't ask for without checking if it was yours or correct.   SW may have made a mistake, but you compounded that mistake either accidentally or opportunistically. 

You can borrow from the credit card again or take out a new loan.   You may be able to stop the loan from being repaid but continued as it was only in the last week.    You could ask SW if they would put the money back, and you would pay them back over 12 months seeing as it was their error.       Whatever happens, the capital must go back into the pension immediately; otherwise, HMRC will pursue 55%.

Duggz

Right, so I really didn’t do great - I just left it all in their hands as I’m not an expert in any way on pensions, I just presumed as the money turned up in my own bank account that they’d returned it to me 

Oh well, best get a loan out to pay myself my own money back 

Duggz

dunstonh said:

I filled out all the forms, and in those forms were the Scottish Widows and HL account numbers.

Scottish Widows and HL use the Origo transfer system.   So, there would be no SW forms to complete.  Only HL forms.  HL would tell SW the bank details to use.

So, it would be interesting to know what SW forms you think you filled in.     In the old days, there were discharge forms, but neither HL nor SW needed those and haven't for over 15 years.   You didn't by any chance fill in obsolete forms and put your bank details in where HL should have put theirs?

Or perhaps did you fill out open market option forms by mistake?   How much is the value of your pension?
open market option would have an SW of

I’m a father of four, I work full time on nights driving a lorry, and I have no way to pay back this which is my own money- which is the most surreal situation caused solely by Scottish Widows mishandling of my money! 

It is not your money until you are old enough to collect it.  Until then, it is under a trust which you cannot access.

After some time, I noticed £4137 paid into my Bank account- with no communication of any kind from Scottish Widows as to why but, trusting their financial expertise, I presumed they’d returned the money to me as it couldn’t go to my HL account for whatever reason. 
<snip>

I am not rich, £4137 is a lot of money to me, so I thought i’d use MY money wisely- I paid off a loan, and a Halfords purchase account, and the rest off my credit card- so not to waste the money and use it wisely. Bearing in mind, I know this is my money as it’s the amount I’d mentioned. 

That is not good enough to pass the reasonable expectation test to benefit from a mistake.  i.e. you had no reasonable expectation for this money.   You also made no attempt to find out why you had received it.    You spent it on a whim, and you don't get to keep it.    Nothing you did was wise.

They have now threatened to charge me some kind of unauthorised payment thing, the thing is- Ive now realised I didn’t even give them my bank details so I am now puzzled as to why they sent it to me if that was not what they were intending to do!!

There is no threat.  It is a reality. It is HMRC that charge this.  It's 55% of the amount of the unauthorised payment.

I’m a father of four, I work full time on nights driving a lorry, and I have no way to pay back this which is my own money- which is the most surreal situation caused solely by Scottish Widows mishandling of my money! 
<snip>

What do I do? I’ve now not got the money and I did nothing wrong!! 

You did lots wrong.   Spending money you didn't ask for without checking if it was yours or correct.   SW may have made a mistake, but you compounded that mistake either accidentally or opportunistically. 

You can borrow from the credit card again or take out a new loan.   You may be able to stop the loan from being repaid but continued as it was only in the last week.    You could ask SW if they would put the money back, and you would pay them back over 12 months seeing as it was their error.       Whatever happens, the capital must go back into the pension immediately; otherwise, HMRC will pursue 55%.

Thank you for your very informative reply, I appreciate you sharing your knowledge- of which, and I’m adequately sure you already realise, I have none when it comes to such things. Hence my predicaments. 

jimjames

Duggz said:

Oh well, best get a loan out to pay myself my own money back 

It might be your money but unfortunately isn't normally accessible until 55 or 57 depending on your date of birth otherwise you have to pay most of it in tax penalty. So even if you don't pay it back to SW you'll owe HMRC 55% of what you received, far better to pay it back one way or another so you don't lose all that money to tax.

Duggz

dunstonh said:

I filled out all the forms, and in those forms were the Scottish Widows and HL account numbers.

Scottish Widows and HL use the Origo transfer system.   So, there would be no SW forms to complete.  Only HL forms.  HL would tell SW the bank details to use.

So, it would be interesting to know what SW forms you think you filled in.     In the old days, there were discharge forms, but neither HL nor SW needed those and haven't for over 15 years.   You didn't by any chance fill in obsolete forms and put your bank details in where HL should have put theirs?

Or perhaps did you fill out open market option forms by mistake?   How much is the value of your pension?
open market option would have an SW of

I’m a father of four, I work full time on nights driving a lorry, and I have no way to pay back this which is my own money- which is the most surreal situation caused solely by Scottish Widows mishandling of my money! 

It is not your money until you are old enough to collect it.  Until then, it is under a trust which you cannot access.

After some time, I noticed £4137 paid into my Bank account- with no communication of any kind from Scottish Widows as to why but, trusting their financial expertise, I presumed they’d returned the money to me as it couldn’t go to my HL account for whatever reason. 
<snip>

I am not rich, £4137 is a lot of money to me, so I thought i’d use MY money wisely- I paid off a loan, and a Halfords purchase account, and the rest off my credit card- so not to waste the money and use it wisely. Bearing in mind, I know this is my money as it’s the amount I’d mentioned. 

That is not good enough to pass the reasonable expectation test to benefit from a mistake.  i.e. you had no reasonable expectation for this money.   You also made no attempt to find out why you had received it.    You spent it on a whim, and you don't get to keep it.    Nothing you did was wise.

They have now threatened to charge me some kind of unauthorised payment thing, the thing is- Ive now realised I didn’t even give them my bank details so I am now puzzled as to why they sent it to me if that was not what they were intending to do!!

There is no threat.  It is a reality. It is HMRC that charge this.  It's 55% of the amount of the unauthorised payment.

I’m a father of four, I work full time on nights driving a lorry, and I have no way to pay back this which is my own money- which is the most surreal situation caused solely by Scottish Widows mishandling of my money! 
<snip>

What do I do? I’ve now not got the money and I did nothing wrong!! 

You did lots wrong.   Spending money you didn't ask for without checking if it was yours or correct.   SW may have made a mistake, but you compounded that mistake either accidentally or opportunistically. 

You can borrow from the credit card again or take out a new loan.   You may be able to stop the loan from being repaid but continued as it was only in the last week.    You could ask SW if they would put the money back, and you would pay them back over 12 months seeing as it was their error.       Whatever happens, the capital must go back into the pension immediately; otherwise, HMRC will pursue 55%.

Just to add, I didn’t fill out any Scottish Widow forms- I I put the Scottish Widows and HL account numbers on the forms- which were from HL themselves. 

Altior

Two parts to this I'd say. 

Clearly it is unsatisfactory (to say the least), that the funds were paid to your bank account, instead of transferred to another pension platform as instructed. There is definitively a reasonable (polite) formal complaint to be made here, that it led to you (wrongly assuming), that you were free to make use of the funds (which you did), and now faced with a personal cashflow dilemma. You should at least get some goodwill payment, since this a pretty poor error on SW's part. And possibly some time to pay. 

The second part is that you will still need to find a way of getting the funds back together, and returning them to the pension. Or of course, face a massive tax hit, as has been laid out.

As an aside, it's pretty easy for people who are used to being liquid to dismiss it, but for people who aren't so used to having decent funds available suddenly having them pop into their account (possibly the OPs scenario), it takes plenty of willpower not to touch it (even if you think, in the back of your mind, that it's possibly not quite right). The OP didn't go on a spend up, but did use it to pay off debt, which would have been sensible if the funds were genuinely available. A real world impact of a technical blunder from a financial institution, I personally don't think a 'sorry but' is satisfactory alone, even though mistakes do happen. 

dunstonh

Duggz said:

dunstonh said:

I filled out all the forms, and in those forms were the Scottish Widows and HL account numbers.

Scottish Widows and HL use the Origo transfer system.   So, there would be no SW forms to complete.  Only HL forms.  HL would tell SW the bank details to use.

So, it would be interesting to know what SW forms you think you filled in.     In the old days, there were discharge forms, but neither HL nor SW needed those and haven't for over 15 years.   You didn't by any chance fill in obsolete forms and put your bank details in where HL should have put theirs?

Or perhaps did you fill out open market option forms by mistake?   How much is the value of your pension?
open market option would have an SW of

I’m a father of four, I work full time on nights driving a lorry, and I have no way to pay back this which is my own money- which is the most surreal situation caused solely by Scottish Widows mishandling of my money! 

It is not your money until you are old enough to collect it.  Until then, it is under a trust which you cannot access.

After some time, I noticed £4137 paid into my Bank account- with no communication of any kind from Scottish Widows as to why but, trusting their financial expertise, I presumed they’d returned the money to me as it couldn’t go to my HL account for whatever reason. 
<snip>

I am not rich, £4137 is a lot of money to me, so I thought i’d use MY money wisely- I paid off a loan, and a Halfords purchase account, and the rest off my credit card- so not to waste the money and use it wisely. Bearing in mind, I know this is my money as it’s the amount I’d mentioned. 

That is not good enough to pass the reasonable expectation test to benefit from a mistake.  i.e. you had no reasonable expectation for this money.   You also made no attempt to find out why you had received it.    You spent it on a whim, and you don't get to keep it.    Nothing you did was wise.

They have now threatened to charge me some kind of unauthorised payment thing, the thing is- Ive now realised I didn’t even give them my bank details so I am now puzzled as to why they sent it to me if that was not what they were intending to do!!

There is no threat.  It is a reality. It is HMRC that charge this.  It's 55% of the amount of the unauthorised payment.

I’m a father of four, I work full time on nights driving a lorry, and I have no way to pay back this which is my own money- which is the most surreal situation caused solely by Scottish Widows mishandling of my money! 
<snip>

What do I do? I’ve now not got the money and I did nothing wrong!! 

You did lots wrong.   Spending money you didn't ask for without checking if it was yours or correct.   SW may have made a mistake, but you compounded that mistake either accidentally or opportunistically. 

You can borrow from the credit card again or take out a new loan.   You may be able to stop the loan from being repaid but continued as it was only in the last week.    You could ask SW if they would put the money back, and you would pay them back over 12 months seeing as it was their error.       Whatever happens, the capital must go back into the pension immediately; otherwise, HMRC will pursue 55%.

Just to add, I didn’t fill out any Scottish Widow forms- I I put the Scottish Widows and HL account numbers on the forms- which were from HL themselves. 

That rules out Open market option payout error then.  
The Origo transfer method bascially sees HL input the transfer request on the Origo system, which then electronically notifies SW.  There is an electronic exchange of details to allow the transfer and SW send the money to HL.   

You should complain to SW.   Whilst you won't get the money written off, they may allow a repayment period.  The call centre staff won't have any options open to them other than full repayment, but the complaints team will have more options available.   They may even pay £100-£250 as a goodwill gesture for the error.

Kim_13

Presumably SW had OP's bank details via the payments going into the pension, and messed up when they transferred the money to that account rather than using HL's details they should have received as part of the transfer process.

Albermarle

OP
You need to complain ( officially ) to SW and ask how a requested transfer to HL, ended up in your bank account.

If nothing else it will hopefully delay when you have to return the money.