Countrywide Assured redress payment

TheGreenFrog

I have received an interesting letter from Countrywide Assured. I think it relates to a personal pension I started with Merchant Investors many decades ago. I made payments for a couple of years and then stopped because I could not afford it any longer. Over the years the value of the very modest fund got eroded by the charges until eventually there was nothing left!

CA's letter refers to me cancelling the policy (I didn't but I guess it got cancelled when there was no longer enough in it to pay their fees!). It says that I am owed some money "due to some historic issues with the way in which the …fees have been calculated and therefore deducted from some of our funds". The amount owed (plus interest) is not big and they are proposing to pay me as a small lump sum payment with some of it subject to income tax.

Just wondering what the thoughts of others are on this. It must apply to quite a few people as presumably it does not relate only to people who have cancelled their policies. I have emailed them asking for further details and also whether payment can be made to my SIPP instead - maybe there is not much point in that but might simplify tax for me.

dunstonh

CA's letter refers to me cancelling the policy (I didn't but I guess it got cancelled when there was no longer enough in it to pay their fees!).

Cancellation may well refer to the contributions.

Just wondering what the thoughts of others are on this. It must apply to quite a few people as presumably it does not relate only to people who have cancelled their policies.

If an error has been identified that could apply to other people, then they have a duty under FCA regulations to proactively deal with all the others affected. So pretty routine.

I have emailed them asking for further details and also whether payment can be made to my SIPP instead - maybe there is not much point in that but might simplify tax for me.

Or you put it into your SIPP and get back the tax that would be deducted.

retiringin26

It might be classified as a "winding up lump sum" ( and I guess they'd need to tell you if this is the case ) if so, then - as I understand it - the payment and any lump sum as part of it doesn't count as a BCE and it also doesn't reduce your Lump Sum Allowance.

There's a gov.uk page all about this kind of exception situation, if it does indeed apply in this case.

If that's the case you'll have BR tax deducted and a P45 issued