Private pension and annuity problems are on the increase. Although complaints about occupational schemes have dropped, problems with personal pensions and annuities drove a 10% increase in complaints to the Pensions Advisory Service (TPAS) in the past financial year ending in March.
The government funded body called TPAS dealt with 7,746 complaints, up from 7,026 the previous financial year. It said that poor administration by pension providers was mainly the cause, leading to both mistakes and long delays. The good news is that the number of complaints about occupational pension schemes dropped by around 2% during the year. Unfortunately, many savers have experienced significant reductions in the value of their pension funds from the continuing stock market falls we are witnessing and delays in obtaining annuity quotes or award often meant a further fall in the level of pension eventually secured.
A lot of the complaints about the many delays were due to the problems insurers had in integrating their computer systems after merging or being taken over. Mistakes and errors did generate a lot of complaints, and they resulted, not only in some cases in a loss of expectation, but actual financial loss when expenditure or some form of commitments had been entered into in the belief that a pension annuity award or lump sum was correct when, as it later turned out, it was not.
The service dealt with around 75,000 phone calls and something like 12,500 letters, and there was a clear increase in the number of questions about the security of pension schemes and insurance companies. TPAS does, though, give free information to the public about pension matters, which is extremely useful. However, insurance companies need to get their houses in order, particularly when it comes to pension fund transfers for annuity purchase. Delays are causing too many retirees to miss out on the best annuity rates.