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Client pays the price

Annuities are widely acknowledged as potential nightmares to arrange.

My client turned 65 on October 23. He wants to crystallise two non-protected rights personal pensions, at maturity, on his birthday.

Six impaired life annuity providers quoted. The one offering the best rates obtained medical evidence. All the forms were duly completed and submitted to the pension providers. One was Legal & General and the fund was in with-profits.

Instructions were that the transfer should not take place before October 23, 2008 as Legal & General had a 10 per cent MVR in place. My client’s statement from Legal & General, dated October 7, gave a fund value of £51,420.14. It had the usual caveat that the value was not guaranteed but was close to a figure on September 16 of £51,313.83.

The paperwork was with Legal & General on October 15. A phone message on October 29 said the value of the plan was now £47,712.69. This was due to reductions in terminal bonuses on October 22. Strong protests apparently took the complaint to the highest level but without success.

The funds reached the annuity provider on November 6 but with no interest paid on the delay from October 23. Payment from the other provider, Axa, was received on October 29. Standard Life has honoured earlier terminal bonuses when transferring funds for an annuity despite their rates cut.

Many advisers do their utmost to treat customers fairly, it would seem that some major providers are not bound by the same code.

Rosemary Heaversedge

Principal

Shropshire Independent Financial Services

Shrewsbury

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