View more on these topics

Clerical doubles money in pension projection blunder

Clerical Medical has sent out incorrect pension valuations to over 2,500 policy- holders, telling them their funds were worth more than double the real value.

The error saw Clerical write to 3 per cent of its 95,000 personal pension policyholders.

One policyholder saw his pension fund plummet by 140 per cent in two months. He was told in December that his pension fund was worth £120,000 but two months later Clerical wrote again, valuing it correctly at £50,000.

Franklins Financial Services partner Neil Franklin was contacted by a confused client, asking if the fall was because of share volatility.

He contacted Clerical and was told that a batch of policyholders had received incorrect valuations in December. Clerical has apologised for the problem, caused by what it described as a system fault.

The botched letters, explaining changes in char-ging structures to come in line with the stakeholder charge cap, also showed projected retirement val-uations varying from £367,000 to £213,000.

Clerical says it spotted the mistake in January and sent out correct valuations in February after an investigation, with a letter of apology, although not all policyholders appear to have received that letter.

Franklin says: “My client was really shocked. He asked me whether the fall was down to the volatile stockmarket. It makes you wonder whether they know if these are the right figures now.”

A Clerical spokeswoman says: “We are sorry that a small number of policyholders received incorrect projections on their pension plans. We were upgra-ding all existing personal pension charges so they did not exceed 1 per cent of fund value each year.

“Unfortunately, a system fault meant that 3 per cent of customers received incorrect projections on their plans.”


Julian Gibbs

The problem with tracker funds is that they guarantee to underperform their respective index. This is because there are charges, albeit low. The average charges for FTSE 100 trackers are 1.7 per cent initial and 1 per cent annual. Furthermore, because nowadays there is a constant movement of shares in and out of the index, […]

Progress sluggish for Euro single market

Rapid progress is needed if the European Union is to meet its objective of a single market for financial services in 2005, according to the “half-term” review of the EU financial services action plan last week.The plan was launched in 1999. President of the Euro-pean Commission Romano Prodi stressed the importance of achieving a single […]

Brave the new world

As the shock of the FSA proposals to scrap polarisation diminishes, now is the time for IFAs to take a step back from the furore and assess their place in the new world.Many of us share valid concerns that the new regime stands little chance of bringing about the consumer clarity that the FSA says […]

Consumers will be the losers, say 92% of advisers

Ninety-two per cent of IFAs think consumers will be worse off following the FSA&#39s proposed changes to polarisation, with only 6 per cent believing the public will benefit.The finding comes des-pite the FSA consistently maintaining that consumers will benefit most from the changes.The numbers did not vary depending on region or income, with independent advisers […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm