Pensioners Due Compensation: The Annuity Mis-selling Scandal
Thousands of people, typically in their sixties, have been sold the wrong type of annuity when cashing in their pension. They could now be eligible to make claims for compensation.
Many people who retire buy annuities – a type of insurance that pays an income for life on retirement. The annuity market is worth over £10 billion, with around 400,000 annuities being sold each year.
Investigation by newspapers and financial watchdogs have uncovered that approximately one in four pensioners were mis-sold annuities between the years 2007 and 2013. That is around 100,000 people each year that were short changed.
The mis-selling involves savers with poor health who purchased annuities. Those with medical conditions such as diabetes and high blood pressure etc, as well as those who smoke, for example, should have been given an increased annuity due to lower life expectancy. Those that meet the qualifying criteria should have received at least an additional 25% on their annual pension annuity income – on a £100,000 pot that could be around £1,500 annually.
The National Association of Pension Funds indicated around 60% of people should have received the increased annuity based on ill health. However the Financial Conduct Authority (FCA) found that only 7% of those who were entitled to the increased pay outs automatically received them, and very few were offered these deals on their annuities.
The FCA also stated that around eight in ten people who stayed with their existing provider didn’t get a good deal, and called for urgent action to “fix the broken market”.
Government adviser on older people, Dr Ros Altmann, declared: “We will never uncover the true extent because some victims have died, but older people were failed on any test of fairness and should … seek redress.”
Those who used a financial advisor or who shopped around are the ones who typically got the best deals on annuities for their circumstances.
Those who bring a case of mis-selling forward could, in many cases, get pension increases of thousands of pounds a year. We can help.
Was I mis-sold an annuity?
If your annuity provider did not ask basic health and lifestyle questions when you signed up, you may have been mis-sold your annuity product. Those pensioners who had medical conditions should have been able to sign up to enhanced annuities that pay a slightly larger annual income than a standard one due to the lower level of life expectancy.
It should also have been clarified that customers could shop around to find the best deal for their circumstances.
Because there are, over a decade, almost a million people who should have purchased enhanced annuities, it is estimated that over £5 billion has been lost to them.
Furthermore, it is estimated that over half a million widows have been left with nothing when their partners died – because an annuity makes the assumption that you do not have a partner. They are thought to have missed out on over £2.5 billion.
How do I get what I’m rightfully owed?
It is unlikely that your annuity provider will automatically pay you the money you are owed. One company, Aviva, has indeed done so after admitting that 250 customers who qualified for enhanced annuities but who were not provided them, are now getting £500 compensation and an average annual increase of £120 a year to their income. This is a drop in the ocean.
Get in touch with us today to discuss your annuity – we can help you get your enhanced payments and get compensation too for the mis-selling. Were you asked about your health, or ever informed that medical conditions could increase the size of income you get? Were you made aware of your right to shop around for the best deal for you? If you were, you might not have a case for mis-selling.
If your health wasn’t taken into account for your annuity – you could very well have a claim. Its possible that only parts of your medical history were taken account of, and thus you still could have a claim for reassessment. You need to be able to prove the condition of your health at the time you signed up to the annuity – your normal doctor’s records should do.
Our specialist lawyers are on your side. We have the know-how and experience to help you get the money you deserve to have – in a straight-forward and stress-free manner. We can handle the whole legal claims process for you, from start to finish, ensuring that your case is heard fairly and dealt with effectively. We will keep you updated at all times, and offer a no win no fee guarantee meaning that if you don’t win your case, you will not be left out of pocket. Call today, you have nothing to lose!