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Pension Annuities Claims

Do you have a pension annuity? Could it have been mis-sold to you? Recent Government studies have revealed pensioners across the UK may be entitled to thousands of pounds of compensation as a result of mis-selling. 

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The Pensions Minister Steve Webb on Mis-Selling

“Companies have clearly traded on the fact that consumers don’t shop around… I think they are making what I suppose an economist would call, excess profits.....taking advantage of people staying put.”

“I think successive governments have failed to ensure that consumers get good value for money in the annuity market and that’s something we’ve got to change.”

“The Financial Conduct Authority, which is the regulator of this market, has only been in existence in its current form for six months, has got this pretty near the top of its list. So, we’ll see further action.”

What constitutes a mis-sold pension annuity?

There are several pieces of criteria that can indicate you were mis-sold a pension annuity:

Were you made aware of the Finance Act's Open Market Option?

The Open Market Option (OMO) was introduced by the 1975 United Kingdom Finance Act and gave the right to shop around for those approaching retirement. Regulator studies have revealed an overwhelming lack of proper communication material from providers. This material should have made you aware of your right to shop around. You could have increased your income for life by up to 20% and could be awarded compensation.

Were you asked about your lifestyle or medical history?

You should have been asked questions about your lifestyle or medical history. Questions could be similar (but not exclusive) to:

  • Do you drink alcohol frequently?
  • Do you smoke frequently?
  • Have you ever been hospitalised by a serious illness?
  • Have you ever been regularly prescribed medication for a medical condition?
  • Did your work involve hazardous materials?

If the answer to one or more of these questions is "yes" but you weren't asked similar questions when the policy was sold then you could have increased your income for life by 30% or more and could be awarded compensation.

Were you offered the option to protect your pension annuity upon your death?

A value-protected annuity your original saving (after payouts and tax) is returned to you. If this was not offered to you, this could be a mis-sell and you could be entitled to compensation.

Was it clear your pension annuity was a single or joint policy?

Were you told your spouse would no longer receive income for life on your death without a joint policy? This should have been made explicitly clear by the documentation you received and a failure to do so could constitute a mis-sold annuity and you could be entitled to compensation.

Were you made aware of the risks surrounding Unit Linked pension annuities?

A Unit-Linked pension annuity sees your money invested similarly to a unit trust. Your income for life depends on the value of the stocks and shares etc. that your units represent. Were you made aware that is a high risk investment?  If not, you could be awarded compensation.

Were With Profit pension annuities properly explained?

You should have been allowed to choose an Anticipated Bonus Rate (ABR) for your With-Profits annuity. However, it should have been made clear to you that high ABR annuities have a higher initial income but also have less likelihood of increasing in the future. If this wasn't explained clearly, you could be entitled to compensation.

Contact our Pensions Annuities Claims Solicitors

For expert advice and representation with your Pension Annuities Claim, please contact our solicitors today on 01698 207050 or complete our online enquiry form.