Here’s a story about an overpaid pension annuity; never mind the best annuity rates with this one. Taken from a national newspaper, about someone’s mother in law. She worked as a domestic in Edinburgh for around 20 years and had a pension plan with NPI. Just prior to her 65th birthday, she received an annuity quote from leading pension company, Standard Life, which she felt gave her enough money to enjoy her remaining years in retirement. She opted to utilise the maximum sum, £7,000, and would receive around £1,000 a year.
Four months later she received a disturbing letter from NPI claiming that one of its employees had, in error, placed £10,000 too much in her pension pot when it sent the money through to Standard Life, giving her one-third more pension annuity income than she was entitled to. The letter was very brief and simply asked her to sign a slip at the bottom authorising Standard Life to return this amount of money within a few weeks otherwise they would investigate other avenues to recover the money.
Naturally, this letter has totally devastated her. She would not have retired and taken her annuity when she did if she had known she had so much less to live on. NPI were written to and said it would investigate the mistake and reply within a four week period. Instead, another letter arrived a month later saying a senior person was getting involved but couldn’t find out how the error had occurred. Four weeks after that, another similar letter arrived. without any sign of a resolution.
Clearly no one at NPI gave a moment’s thought to the great impact such an error would have on that person’s mother-in-law. It was bad enough delivering news of this sizeable pension annuity overpayment in a threatening letter, but even worse to leave her worrying whether she was going to be left with enough income to live on. All she had done was to move her hard earned pension fund to find what she thought were the best annuity rates for herself. At least NPI has now found out what went wrong. A member of staff muddled the pension with that of another employee at the same firm who had a pretty similar name and then sent the other woman’s pension pot to Standard Life. It accepts it made a big mistake and has agreed to allow the mother-in-law to keep the extra £10,000. To apologise for the great distress caused, NPI is also sending a cheque for £250. A reasonable conclusion to quite a worrying situation.
