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Scottish Life may review annuity sales after Channel 4 Dispatches investigation

Scottish Life says it is considering reviewing a “representative sample” of annuity sales following an investigation by Channel 4’s Dispatches.

The programme, which aired last night, highlighted the case of Frank Adams, a man with a £29,000 pension pot who was sold a single-life annuity by Scottish Life in 2005 – despite supplying a marriage certificate and his wife’s birth certificate with his annuity application. Adams died from cancer last year.

Scottish Life, which is owned by mutual insurer Royal London, agreed to put in place the pension that would have been payable to Adams’ wife had her husband bought a joint-life annuity, backdated to December 2012.

Royal London head of corporate affairs Gareth Evans says Scottish Life could review a sample of annuity sales but believes Adams’ case was a one-off.

He says: “We think this is a one-off and we accept our administration should have been better.

“We may look at a representative sample of annuity sales but we have not come across any cases of this nature before.”

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. I saw this and whilst some valid points were made, as ever the story is about the story not about educating the public. Poor Ros Altmann was edited down to a few seconds. Scottish Life came out pretty well to my mind (given the sparse info). The great sadness in this is that the chap that bought the annuity appears not to have understood what it did and clearly had a different approach to what “well cared for” means when the fund was only £29,000. The family displayed their lack of understanding too – thinking he was taking care of everything, without taking any responsibility or being engaged in the decision (sad but true). This was yet another missed opportunity to explain what proper financial planning is all about and WHY people need proper advice and help and should not simply phone around for a best price…. though that’s better than taking the annuity on offer most of the time.

    Sadly the show merely exposed how little the public understand (and Disptaches) and with this very simplistic show I fear they have no genuine intention to educate. Condensed into a 30min show, they attempted to cover everything from AE, pensions liberation, annuities, property investment, pensions and charges. If the Government, regulator and media are genuinely serious about financial education, shouldn’t shows like these be rather better?

  2. I watched this programme and as usual it was a facile piece of reporting pandering as ever to the dumbest of the dumb. The interviewees made out that they were almost destitute without the continuation of the annuity. It was £1,000 per YEAR! Yes, a useful amount, but after tax £800 p.a is hardly a life changer.

    I thought Scottish Life were very good in rolling over so comprehensively. OK the guy sent in his marriage cert. However the main lesson wasn’t mentioned – use an adviser – for Pete’s sake. Sure pensions are complicated and impenetrable for most. So are many things. Consult an expert. Who now services their own car?

    What these people on the programme (including the fragrant Ros) should have hammered home is that you need independent professional advice. If it costs money – so be it – better than the sort of outcome we saw on the TV. I wonder if Scot Life will now reduce the annuity to reflect a joint life basis – they should.

  3. I did not see the programme but they should have said how vital it is to see an adviser.
    I would have looked at enhanced annuities if the man was unwell or if terminal placed a 100% widows pension or advised him not to take it. The fund would have been the widows anyway on death.
    IT COSTS MORE NOT TO TAKE ADVICE.

  4. I agree wholeheartedly with the comments above. I was surprised Roz Altman didn’t proffer “get independent financial advice” and I question her comment about the next scandal after PPI but I appreciate she was probably edited. Maybe Pension Fund providers should put the line in their retirement packs to “consider taking independent financial advice” in BOLD PRINT. A missed opportunity for a programme maker to help the public get better value from their pension funds at retirement.

  5. By the way has anyone crunched the numbers? If memory serves the total fund was £29,000. (I wonder how much he had contributed – Scottish Life is not renowned for scintillating returns!)
    Take the max Tax Free Cash and you are left with a residual fund of £21,750. In the scheme of things a pretty infinitesimal amount – couldn’t the programme have found anyone with a decent pension pot?
    If the £1,000 per annum annuity is correct and even being generous and presuming this is net (contrary to my post above) then this represents a rate of 5.7%. That’s a pretty naff rate for a single life plan presuming the bloke was 65 at the time. If it is a gross return – then it is an even worse rate of 4.6%. Anyway what they didn’t tell you was his age at vesting, when exactly it was vested or any other pertinent detail. As I said a very facile and pretty worthless piece of journalism – but then that’s really par for the course on anything vaguely technical – whether financial services or anything else. That’s what drives me nuts. They don’t understand their topic and can’t be bothered to properly come to grips with it. That encompasses engineering, global warming and Foreign Aid – those subjects on which I have some insight. No doubt others have their own areas of interest outside our own field.

  6. We’ve had some interesting views from the team here at PTL. One manager commenting – “£800pa is a lot of money for lots of people – they obviously haven’t had calls from pensioners who have just had their pension reduced by £50pm saying they are really struggling. £800pa will keep the heating on, allow them to have a xmas, help with the ‘do I eat or keep warm’.” another manager commented that Dispatches was “a reminder to save hard and always look at the Open Market Option and take advice when buying an annuity.”

  7. PTL – PTL is a specialist Independent Pensions Trustee company. They deliver pensions governance advice to businesses across the UK.

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