Norwich Union has overestimated the retirement inc-ome of thousands of savers by sending out inaccurate statements about how much cash they can expect to receive in retirement.
An error in the calculation of the annuity rate means 97,000 customers received statements which overstated the income they could get in retirement by 15 per cent.
The annual statements quoted the present value of the policy, how much it could build up and how much income could be expected.
The mistake was due to the wrong annuity rate being input into the IT system.
Norwich Union is planning to send out correction letters to all customers affected towards the end of July and says it has taken measures to ensure the mistake does not happen again.
NU head of pensions Iain Oliver says: “We recognise that we have made this error. The fund value was correct but the income was inflated. We apologise to our customers. I do not think it will have had too big an impact on customers.”