The Financial Conduct Authority launched an investigation into annuity misspelling in 2014. Since then Aviva has already started to compensate some of its customers but this is thought to be the tip of the iceberg and Standard Life had to set aside £175m earlier this year to compensate customers.
An annuity is what you buy when you retired, you give up your pension pot in return for an annual income for life. Sometimes your annuity can be passed to your spouse if you die (often at a reduced rate).
Usually the company where you saved your pension pot is the first one you discuss an annuity with and they don’t always provide you with the right advice.
Pension companies have to abide by rules that mean they have to provide certain information to customers including whether those customers could get a better annuity rate with another provider by shopping around, or whether those customers could be entitled to an enhanced rate because they suffer from illnesses such as diabetes or high blood pressure.
You may have been able to get 20-25% more with another provider. On a £100,000 pension pot the annual loss would be a little over £1,000 and so if you took out your annuity at 65 years of age and lived another 20 years you could be £20,000 worse off.
I will blog about this more but for now, if you have any queries or wish to investigate a claim please contact Nick on 01925 759 510 or fill in the contact form on the side of this page.