Some 250 Scottish Life pension customers have seen their fund values drop 12 per cent after the insurer clawed back interest it overpaid without telling them.
Intelligent Pensions was recently quoted a transfer value of £45,510.33 for a client after being quoted £51,690.30 in March 2009.
As the money is in a late-vesting account, which adds interest after the policy’s maturity date, the firm queried the drop.
Scottish Life told the company that from 2007 the late-vesting interest rate was applied to policies “incorrectly at a double rate”. It added that the problem was identified in September and it corrected the policy values, resulting in all affected policies dropping in value. But the insurer failed to inform policyholders of the mistake.
Intelligent Pensions technical director David Trenner says: “This is an appalling error but what makes it worse is that they are happy to grab back the money added to the policy without authority from the client.
“If a shopkeeper gave me too much change, I would not expect him to come running out into the street and mug me to get it back. It seems insurance companies are more than happy to mug their policyholders.”
A Scottish Life spokeswoman says: “In this instance we have not achieved the high standards we set for ourselves. The value of each of these policies is now correct, so the policyholders are in the position they should have been had the mistake not happened.”