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Advisers frustrated by ScotWids’ ‘appalling’ pension input period policy

Advisers are being frustrated by Scottish Widows’ apparent reluctance to share details of schemes’ pension input periods, branding the firm’s policy “appalling”.

A PIP is the period over which pension contributions are measured for annual allowance purposes. Although most post-2011 schemes have PIPs aligned with the tax year, older arrangements commonly have periods set from the day the sfirst contributions were paid.

A number of advisers have become frustrated at Widows’ apparent refusal to share information on PIPs.

Wingate Financial Planning director Alistair Cunningham says: “Not furnishing advisers with sufficient information potentially exposes the pension holder to additional taxation and providers not putting it in writing leaves room for doubt when the information supplied differs from what you were told verbally. It’s appalling practise for firms not to provide information in writing when requested.”

Executive Benefit Services compliance managers Jennifer Malcolm says: “The implication of getting this calculation wrong directly impacts the client and could mean that they pay more tax. HMRC state that the pension scheme administrator will be able to confirm the member’s Pension Input Period.”

A letter sent by Scottish Widows to an adviser requesting information and seen by Money Marketing says: “Our position regarding pension input period information is it is not a requirement of a pension administrator to provide this information.This is a business decision which has been taken in line with the requirements of a pension administrator”.

A Scottish Widows spokesman says: “While we are not in a position to routinely provide detailed information on pension input periods, we can provide information on contribution dates on request, to assist advisers making calculations for clients.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Joanne Craddock 27th March 2015 at 10:40 am

    I have suffered at the hands of this ridiculous policy – apparently, these are HMRC rules, according to Scot Wids. So every other company is breaking rules when they provide me with this information then, are they?

    I am still awaiting a response to my letter to them following their complaint response where they refused to provide the info – a contribution history doesn’t help!!

  2. I’m quite amused to see this making headlines. I’ve had this problem as well.

    HMRC’s rules specifically state that the scheme administrator has the power to alter the pension input period at its discretion (see RPSM06106070 inter alia) so Scottish Widows’ insistence that the adviser should work it out for themselves is simply not acceptable. Scottish Widows has a duty to confirm what the PIP is, because whether by action or omission, the PIP is determined by Scottish Widows. The adviser cannot simply assume that the PIP runs in line with the tax year (for post April 2011 policies) or the first contribution (for pre April 2011 policies) because Scottish Widows may have altered this. And getting it wrong may completely mess up the annual allowance calculations and result in a significant tax charge.

    The last time I pointed this out to the call centre worker, she went away and consulted with the higher-ups for a few minutes, then eventually came back and confirmed what I already suspected was the answer. So they are in fact perfectly able to confirm this if they are more desperate to get rid of you than to adhere to their stupid policy.

    I would urge everyone to continue submitting complaints if Scottish Widows refuses to do its duty and disclose PIPs. Perhaps pointing out the potential claim that may fall on them if the client’s available allowance is calculated incorrectly and Scottish Widows becomes liable for the resulting tax charge may focus their minds.

  3. Still don’t know why people use Scottish Widows. They have been appalling for about 7 years now

  4. I agree with Sasha.

    @Marty – sorry I have to disagree about Swids being appalling for 7 years……….

    More like a decade or more 🙂

  5. I stopped using them when their consultant insulted me by saying that their investment governance was superior to mine because they had spent millions of pounds on it, and why was I not placing the business with them.

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