Prudential has revealed it is carrying out a review of non-advised annuity sales alongside Standard Life following an FCA inquiry.
Standard Life revealed this morning it had set aside £175m as part of its past business review.
Pru has also announced that following discussions with the FCA, it too is carrying out a review involving members of contract-based defined contribution schemes into whether they were given sufficient information about the option for an enhanced annuity.
The review will cover non-advised annuity sales from 1 July 2008 where net pension pots were worth £5,000 or more. Pru will contact any affected customers directly if the review finds they are eligible for redress.
In October, an analyst note from investment bank Jefferies put the potential cost of compensation from the review at £200m.
In a statement posted on the company website, Pru says: “Prudential UK & Europe wishes to advise its customers that it has agreed with the FCA to review annuities sold without advice after 1 July 2008 to its contract-based defined-contribution pension customers.
“The review will examine whether these customers were given sufficient information about the availability of, and their potential eligibility for, enhanced annuities.
“The review will also look at whether these customers could have potentially received a higher income from Prudential or another provider. In due course Prudential will contact customers who may not have been given sufficient information and will provide redress, where appropriate.”
Last year the FCA said a small number of firms were in enforcement following a review of 1,200 non-advised sales at seven firms.