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  • FIRST POST
    • HGS
    • By HGS 6th Sep 19, 7:41 AM
    • 19Posts
    • 2Thanks
    HGS
    Final Pension Calculation
    • #1
    • 6th Sep 19, 7:41 AM
    Final Pension Calculation 6th Sep 19 at 7:41 AM
    I took a zero drawdown pension with L&G and they miscalculated the figures so without discussion repaid the sum as a drawdown.

    I disputed that decision as no facts or figures were included and I was pretty sure it was beneficial to them and not me.

    I also asked for inconvenience costs and compensation for my time dealing with their mistake.

    I was surprised to receive a cheque for over £100 without any bartering making me think that I was on to something they wanted me to drop promptly.

    I asked for facts and figures and whilst I got them, it was clear the figures were totally absurd.

    I pointed this out and got an instant admission and apology.

    The figures showed they calculated the offer without tax deduction over a life expectancy of 20 years but losing an immediate 20% in tax on the one off payment and my belief 20 years is not at all generous for my possible lifespan I calculated I was losing a minimum of £100 from the drawdown.

    The amount is actually irrelevant, but the principal that I decided on no drawdown and they make money ignoring my wishes is not acceptable.

    Given their client base this will amount in millions of profit for L&G.

    If you are being treated in the same cavalier manner firstly ensure you are happy losing money potentially, and secondly offset it with a request for inconvenience costs.

    I have asked for the money to be returned to my pension so principal (and possibly the law) is upheld.
Page 1
    • xylophone
    • By xylophone 6th Sep 19, 10:29 AM
    • 31,434 Posts
    • 19,485 Thanks
    xylophone
    • #2
    • 6th Sep 19, 10:29 AM
    • #2
    • 6th Sep 19, 10:29 AM
    I took a zero drawdown pension with L&G and they miscalculated the figures so without discussion repaid the sum as a drawdown.
    Do you mean that you took a PCLS only and that L&G made an income payment (be exactly sure) without your express request and permission?
  • jamesd
    • #3
    • 6th Sep 19, 1:19 PM
    • #3
    • 6th Sep 19, 1:19 PM
    Did they notify you that you are now subject to the £4000 a year money purchase annual allowance cap on annual pension contributions? Whether you are depends on the type of payment that they made, some would trigger it, others not..
    • HGS
    • By HGS 7th Sep 19, 5:10 PM
    • 19 Posts
    • 2 Thanks
    HGS
    • #4
    • 7th Sep 19, 5:10 PM
    ?
    • #4
    • 7th Sep 19, 5:10 PM
    I have no idea what you are asking. If my explanation is confusing then I canít help.

    Clearly I am not wrong as they have offered to do what I want and not what suited them.
    • HappyHarry
    • By HappyHarry 7th Sep 19, 5:44 PM
    • 982 Posts
    • 1,451 Thanks
    HappyHarry
    • #5
    • 7th Sep 19, 5:44 PM
    • #5
    • 7th Sep 19, 5:44 PM
    Just so I understand ...

    You asked for a tax free lump sum from your L&G pension, with no taxable income to be paid?

    L&G then paid you a lump sum and mistakenly also paid you some taxable income?

    You complained, and they apologised but provided you with no figures, but did include £100 for inconvenience?

    You then asked for figures regarding the error and L&G sent you the wrong figures?

    After bringing that error to L&G's attention, you then received an accurate breakdown of their calculation, which you feel is not fair and makes you at least £100 worse off?

    You are concerned that L&G are doing the same to tens of thousands of their customers and are making £millions in the process?

    If the above is correct and you are still unhappy then you should take your complaint to the Financial Ombudsman.

    I would strongly suspect that this is a one-off error by L&G, and whilst it's not nice being on the receiving end of it, it's probably a step too far to suggest they are swindling £millions out of their clients in this way.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
  • jamesd
    • #6
    • 8th Sep 19, 8:36 PM
    • #6
    • 8th Sep 19, 8:36 PM
    If they paid you ordinary taxable drawdown money, like via UFPLS, that would trigger something called the money purchase annual allowance. The MPAA restricts you to 4k a year of pension contributions. If they did this and you might want to pay more then you need to verify with them that they fully reversed it and you're not subject to the MPAA.
    • sandsy
    • By sandsy 9th Sep 19, 7:23 AM
    • 1,506 Posts
    • 927 Thanks
    sandsy
    • #7
    • 9th Sep 19, 7:23 AM
    • #7
    • 9th Sep 19, 7:23 AM
    The figures showed they calculated the offer without tax deduction over a life expectancy of 20 years but losing an immediate 20% in tax on the one off payment and my belief 20 years is not at all generous for my possible lifespan I calculated I was losing a minimum of £100 from the drawdown.
    Originally posted by HGS
    I think we're all struggling to understand your problem, based on the terminology you used.

    What sort of pension did you have before you accessed it? Most pensions with insurers are based on a pot of money which has been accumulated. Why did they need to do this calculation involving life expectancy?
    • HGS
    • By HGS 12th Sep 19, 5:24 AM
    • 19 Posts
    • 2 Thanks
    HGS
    • #8
    • 12th Sep 19, 5:24 AM
    • #8
    • 12th Sep 19, 5:24 AM
    Given the situation was reported by Martin Lewis it was obviously not a one off.

    I reported it to help others so this sort of guesswork is just pointless and unhelpful supposition.
    • HGS
    • By HGS 12th Sep 19, 5:30 AM
    • 19 Posts
    • 2 Thanks
    HGS
    • #9
    • 12th Sep 19, 5:30 AM
    • #9
    • 12th Sep 19, 5:30 AM
    Sorry you canít understand but if you were one of the people affected and receiving the same treatment you would not need to be asking.

    I am not here to educate, I am here to ensure others affected get a fair deal. If you are not affected my pension arrangements are of no interest and with respect not your business to investigate.

    L&G have apologised for their cavalier attitude and misinformation, compensated me and I will now earn more money than they originally paid out.

    Total vindication not requiring further comment.

    No further posts please.
    • ratechaser
    • By ratechaser 12th Sep 19, 8:26 PM
    • 624 Posts
    • 530 Thanks
    ratechaser
    Sorry you canít understand but if you were one of the people affected and receiving the same treatment you would not need to be asking.

    I am not here to educate, I am here to ensure others affected get a fair deal. If you are not affected my pension arrangements are of no interest and with respect not your business to investigate.

    L&G have apologised for their cavalier attitude and misinformation, compensated me and I will now earn more money than they originally paid out.

    Total vindication not requiring further comment.

    No further posts please.
    Originally posted by HGS
    Well, someone had to...

    Glad you're 'not here to educate' OP, as I suspect it's not your forte...
    • HGS
    • By HGS 17th Sep 19, 2:54 PM
    • 19 Posts
    • 2 Thanks
    HGS
    No itís not my job, but you know everything so nothing would be useful to you.
    • comeandgo
    • By comeandgo 17th Sep 19, 3:13 PM
    • 2,729 Posts
    • 3,748 Thanks
    comeandgo
    Given the situation was reported by Martin Lewis it was obviously not a one off.

    I reported it to help others so this sort of guesswork is just pointless and unhelpful supposition.
    Originally posted by HGS
    Maybe if you show us where Martin Lewis reported it we can read his report and understand better.
  • archived user
    No further posts please.
    Originally posted by HGS
    Given that your posts are as clear as mud, maybe you should take your own advice!
    I suspect L&G paid the £100 in the hope that you would go away.
    • coyrls
    • By coyrls 17th Sep 19, 10:33 PM
    • 1,256 Posts
    • 1,378 Thanks
    coyrls
    Sorry you canít understand but if you were one of the people affected and receiving the same treatment you would not need to be asking.
    Originally posted by HGS
    How would I know if I have been affected?
  • jamesd
    How would I know if I have been affected?
    Originally posted by coyrls
    From the information given there's no way to know without just guessing. A "zero drawdown pension" isn't a thing.

    My guess is that an annuity was purchased but the annuity rate wasn't quite the correct one. So L&G made a calculation of the annuity shortfall using 20 years life expectancy and made an authorised (by pensions rules) non-drawdown lump sum payment intended to cover the difference. I assume that the poster didn't realise that lump sums aren't usually drawdown or know that the exact type of lump sum - not drawdown being particularly important - matters.

    It's then understandable that the poster would object to the 20 year life expectancy and prefer a slightly higher annuity payment. Or a possibly more beneficial higher lump sum.

    Our poster has declined to say enough about the situation for us to know or to know whether they were done out of getting a much higher pension income by being sold an annuity instead of being told about state pension deferral and doing that instead.

    Hopefully they at least know that there's between £720 and £180 a year of extra money available by continuing to make pension contributions when retired. Assuming they aren't a higher rae tax payer, have lifetime allowance available and are not yet 75 years old.
    • HGS
    • By HGS 20th Sep 19, 3:04 PM
    • 19 Posts
    • 2 Thanks
    HGS
    Thanks James, a very constructive response and para 3 is correct 100%.

    Clearly you don’t expect people outside the industry to know all the terminology or the legal situation, but have the insight to follow the complaint.

    I did state that people affected would receive a letter so would appreciate the point I was making. Why some posters not affected feel it is their right to demand attention is beyond me but clearly too much time on their hands and needing to be important.

    I did also point out that the matter was resolved to my satisfaction and that as a result I will be receiving the higher annuity payment monthly.

    Add that to the refund of a lump sum in tax paid to HMC and the payment for my time and I think it was a fair complaint well made.

    There is nothing to made from pointless trolling and it’s water off a ducks back.

    I WILL NOT BE VISITING THIS THREAD AGAIN SO THOSE WHO WISH MAY FEEL FREE TO TALK AMONGST THEMSELVES.
    • IanSt
    • By IanSt 21st Sep 19, 10:28 AM
    • 336 Posts
    • 251 Thanks
    IanSt
    My goodness HGS does have a low opinion of people trying to help him.

    Fortunately I don't think that opinion is shared by many others, and certainly not by me.

    Thanks to jamesd for figuring out what was going on.
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