Pension complaints jump 10%
Complaints relating to pensions have jumped by 10% since March 2008, with nearly 8,000 disputes referred to The Pensions Advisory Service (TPAS) over the 12 month period.
Delays in paying pension benefits and mistakes leading to financial losses were two of the main reasons for the rise in complaints, with poor administration the biggest cause of the increase. TPAS, a government-funded body, says that the majority of complaints were made by people with individual pension plans, with the number of grievances relating to occupational schemes actually falling by 2%.
The credit crunch has been blamed for the increase in pension problems. “Many savers had experienced significant reductions in the value of their pension savings from continuing stockmarket falls and delays in obtaining an annuity quote or award often meant a further reduction in the pension eventually secured,” explains Malcolm McLean, chief executive of TPAS.
Ironically, many complainants also suffered delays in getting a response to their original gripe from their pension providers.
TPAS received 75,000 calls and 12,500 written during the 12 months to March 2009, with 44% of calls and 25% of letters relating to the state pension.
There were also a “significant” number of concerns from people with self invested personal pension (SIPP) plans, some of whom were confused about the product and the level of personal responsibility they had taken on. TPAS says this could indicate deeper issues with the way people are sold this type of pension plan.
Another concerning aspect of the TPAS’ annual report was the increase in people complaining about the non-payment of employer pension contributions, with enquiries doubling to 42 a month during the year.
Tom McPhail, head of pension research at Hargreaves Lansdown, says there are strict guidelines that dictate the timescale for employers to pay pension contributions.
"If this happens to you, then you should raise the issue with your employer," he adds. "If you aren't happy with the response you get, then contact the Pensions Regulator."
Like a self-select ISA but for pensions, self-invested personal pension is a registered pension plan that gives you a flexible and tax-efficient method of preparing for your retirement. It gives you all sorts of options on how you put money in, how you invest it and how it’s paid out and offers a greater number of investment opportunities than if the fund was managed by a pension company. SIPPs are very flexible and allow investments such as quoted and unquoted shares, investment funds, cash deposits, commercial property and intangible property (i.e. copyrights, royalties, patents or carbon offsets). Not permitted are loans to members or people or companies connected to the SIPP holder, tangible moveable property (with the exception of tradable gold) and residential property.
In exchange for any lump sum – usually your pension fund – an annuity is “bought” from an insurance company and provides an income for life. When you die, the income stops. Annuity rates fluctuate daily and depend on your sex (although from 21 December 2012 insurers will no longer be able to use gender as a factor when calculating annuities), age, health and a number of other factors, so you have to pick the right one and, once bought, its terms cannot be altered, so seek financial advice.
All limited liability companies registered in the UK are compelled by law to compile a report once a year on the company’s accounts and directors’ statements must be issued to shareholders and filed at Companies House. A report details a company’s activities throughout the preceding year and its contents will include chairman’s statement, auditor’s report and detailed financial information such as cash flow and balance sheet statements.