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Scottish Widows says lifestyle blunder costs limited to £500k

Scottish Widows expects to pay less than £500,000 in compensation to investors who lost out after its bespoke lifestyling system failed to rebalance members’ pension investments.

Last month, Money Marketing revealed that technical failures meant bespoke investors did not have their funds swit-ched according to their specific fund choices.

Widows’ customers who select bespoke lifestyling should have their investments rebalanced every quarter to reflect their preferences.
The company initially thought that up to 10,000 customers could have been affected by the failure.

However, a Scottish Widows spokesman says the number is “far fewer” than previously feared.

He says: “Our investigations have confirmed that the lifestyle switching has been working as intended. However, we have identified  an issue around rebalancing in a few cases where an adviser has selected multiple funds during the growth phase.

“We are developing a solution to ensure no customer is worse off. Current indications are that the affected population is far fewer than initially thought. We believe that the total compensation amount will be less than £500,000.”

Worldwide Financial Planning IFA Nick McBreen says: “This is an unwelcome additional cost to Widows because it will have to pay both in management time and in putting consumers back to where they should be.”

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