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Lloyds TSB misselling liability nearly £1bn

Scottish Widows parent Lloyds TSB is setting aside almost £1bn to cover its pension misselling liabilities.

The move means Lloyds TSB&#39s liability totals more than 7 per cent of the entire industry&#39s total liability of nearly 13bn, according to FSA figures.

Lloyds TSB is second in the rankings of companies with the biggest misselling liabilities behind Prudential, which has provisions of £1.5bn.

Blaming poor stockmarket performance, Lloyds announ-ced in its annual results that it was boosting provision for compensation this year to £972m from £902m.

IFAs believe the vast majority of the misselling was committed by Widows&#39 direct salesforce but fear its with-profits policyholders – in addition to Lloyds&#39 shareholders – will be forced to foot the bill through lower bonus payouts.

Only last month, Widows admitted it was slashing reversionary bonuses on some policies by up to 33 per cent, the biggest cuts of any life office so far this year.

Roberts Clark director Jo Roberts says: “Lloyds probably inherited most of the misselling problems from Widows – which was one of the biggest companies at the time – but it is still a huge chunk of the total.”

A Lloyds spokeswoman says: “It is not out of the ordinary for a leading provider to have this share of liabilities.”


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Guide: how to… communicate with your pension members

Effective communication of your pension scheme is a large part of getting auto-enrolment right. Delivering the same message to all employees is not necessarily the way to go. To assist you with the communication of your pension scheme, we have provided some key areas to think about, such as:

  • What to consider when segmenting your workforce
  • How to communicate to pension scheme members at the right time in their member lifecycle
  • What topics you should be discussing with your pension members
  • The new pension freedoms and the importance of communicating them


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