Pension provider makes good its error

Shockwaves coursed through a retired couple when they were told that the pension income they had been living on had been calculated wrongly and that they had only days to return the overpayment of well over £1,000 and readjust to having less cash in future.

Life in Spain appeared decidedly less sunny for David O’Brien, 68, after he received the bombshell from Legal & General saying a review had revealed the error and he owed £1,293.

The sum related to a private pension he contributed to for 18 years, and that had been paying him an income for the last three.

David’s wife Maureen told Crusader: “We’ve had sleepless nights since getting the letter. We thought an annuity, once agreed, was for life. My husband receives a basic state pension and this one. We’re concerned as the letter mentioned solicitors and legal action if we don’t pay immediately. But this is their administrative mistake, not David’s. He had no way of knowing the figure was too much. Is it fair that, after all this time, it falls on us?”

Pensioners affected do have the right to complain to the pensions ombudsman. This right is often buried in the small print when savers first take out the plan, inevitably years ago. Otherwise they are told of this right only when they contest an overpayment demand. Not surprisingly many pay up without ever realising their rights.

Challenges to overpayment demands can be made on the grounds the recipients, like David O’Brien, could not have possibly known they were being overpaid nor were trying to profit unfairly.

Many pension providers seem oblivious of the misery such errors cause, ignoring the moral case and insisting only on their regulatory rights. But Legal & General is not one of them.

When Crusader explained the O’Briens’ problems, the company responded by wiping the slate clean and even paying a further £100 as a goodwill gesture for the distress caused.

“We are so grateful we do not have to pay, and Legal & General has not made us go through the upset of having to fight either,” said David. “It means so much. We can get on with our lives again.”

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