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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.”

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