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Blog @ Claims

On the Assist.Claims Blog you'll find interesting articles about pensions and investments as well as news and links to other items we find on the internet concerning the financial claims industry. The government is constantly reviewing legislation on pensions, investments and mis-selling and financial institutions are under increasing pressure from financial regulators.
If you'd like to see more information on particular topics, let us know via our Contact Us page.

Is Annuity Mis-selling the next Financial Services Scandal?

Is Annuity Mis-selling the next Financial Services Scandal?

Do you have a claim?

A leading provider of pensions and annuities has warned that past sales of annuities could lead to a huge new wave of claims against providers. (FCA annuity probe could be next PPI scandal, Widows warns, CityWire, 23rd September, 2015). An annuity is sold by insurance companies to turn your pension “pot” of saved and invested monies, into an income for your life.

But a Financial Conduct Authority (FCA) investigation has revealed that people have not been offered the opportunity to shop around for an enhanced annuity to match their health needs. Writing in The Telegraph (28th August, 2015) Dan Hyde and Katie Morley stated:

“More than 600,000 pensioners are believed to have been sold annuity contracts that failed to account for their health in the six-year period under review. Most were never made aware that relatively common ailments such as diabetes and high blood pressure could have boosted their payouts by 20 per cent or more. In some cases, savers who missed out face losses worth tens of thousands pounds over the course of their retirements.”

Annuities work the other way around to life insurance. If you have complicating acute health issues, such as those mentioned above, then the value of your income is higher, because companies calculate that you are more likely to live for a shorter period of time.

But the FCA investigation, looking at annuity purchases since 2008, has revealed that a large number of people were not informed by their Bank or Pensions Company that the  “enhanced annuity” options would provide them with higher income. For pensioners with a £100,000 pot, this could have cost them over £2,000 per annum in income.

Do you have a claim?

Around six in ten people should have qualified for an “enhanced annuity”, but the FCA investigation appears to suggest that only two in ten were provided with such annuities. The key thing is to ask yourself these questions:

  • Were you in poor health at the time of the advice/purchase ?
  • Is this a documented matter of record with your doctor?
  • If you were advised at a Bank, did they fail to refer you to an IFA?
  • Did your adviser fail to mention an “open market option”?
  • If you were a smoker when you took out an annuity, did you fail to receive a higher annuity rate ? 

If you can answer YES to some or all of these questions, then it is worth getting in touch with us to see if we should make a claim on your behalf.

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