VICTORY!
Forklift driver David was sold the wrong annuity in 2012. Five years after Money Mail told his story Prudential has finally paid up
AFORK-LIFT driver who was deprived of a fifth of the pension he deserved has finally won compensation — five years after his complaint was fobbed off.
It is the first evidence that savers who were sold shoddy annuity deals are getting payouts when they complain.
In 2012, Money Mail featured the case of David Burnett, a lifelong 20-a-day smoker, who was then 65 and had high blood pressure and cholesterol.
David was among millions of people effectively forced to buy an annuity, which pays an income for life, before the pension freedoms were introduced in 2015.
His smoking habit meant he qualified for a higher annual income from his £16,734 pot than a healthy man would have received.
But he was told by Prudential, the firm which held his life savings, that it did not offer that option for his circumstances. David was told the most he could get was £948 a year.
Staff failed to explain, however, that he could have got a so-called enhanced rate from a number of other pension providers.
Our investigations showed that David qualified for a guaranteed £1,131 a year at other firms — an extra 20 pc for life. David, who worked for J. W. Spear & Sons, the Scrabble board maker, says that his complaints fell on deaf ears.
In a statement at the time, Prudential said: ‘We were very clear in our correspondence with Mr Burnett regarding the annuities that were available to him, including enhanced options.’
For almost half a decade, David had to make do with the miserly income from Prudential.
But then in October 2016, Money Mail published a template letter to help readers claim compensation for mis-sold annuities.
We explained that the Financial Conduct Authority (FCA) regulator had found that some firms had been guilty of poor annuity sales practices. That meant some customers may have been entitled to compensation.
We asked all readers who thought they had been put on the wrong deal — particularly the thousands in poor health who, like David, qualified for an enhanced deal — to submit claims.
As part of our Unlock Our Pensions campaign, Money Mail called for fair compensation payouts.
David cut out the letter and sent it to Prudential, explaining that he had already submitted a complaint in 2012. He received several replies explaining that his claim would be re-examined.
Then in August this year, Prudential wrote to him saying it was giving him just less than £600 compensation to cover income he’d missed out on since 2012. HIS
pension will also be boosted to a level that reflects his health conditions. Prudential said it would have to discuss with the FCA how much extra this would be. David has been told to expect confirmation in another letter in early 2018.
In its apology letter, Prudential said it had reviewed the set-up of his policy in 2012, listened to his calls with customer service staff at the time and looked at the documentation it had posted to David.
Investigators had concluded that he had not been made aware that another provider could have given him a better annuity.
Prudential was, therefore, paying compensation and enhancing David’s payout in recognition of offering poor service.
David says: ‘I get the Mail every day and am so glad I get it on Wednesdays because I only sent the letter in Money Mail on the offchance it might make a difference.
‘It’s a disgrace, really, that after all my letters and all this time complaining it turns out Prudential were in the wrong.
‘This will make a real difference as it’s all I’ve got to live on after the state pension and some equity I’ve released from my ex-council house.
‘It makes me think — what about the millions of people who haven’t pushed their pension company and are still struggling? It only took a few minutes to write the letter.’
A spokesman for Prudential says: ‘We are glad to have made progress in addressing the issues that Mr Burnett’s experienced and to have made an initial payment to him, backdated to 2012 when he took out his annuity.
‘We are working hard, alongside the regulator, to resolve this matter fully and we anticipate being able to update the amount of pension Mr Burnett receives in the New Year.’
It said the initial payment was its own estimate of how much David is due. If the figures agreed with the FCA are lower it won’t ask for the compensation back.
Prudential and Standard Life Aberdeen are gearing up to pay out hundreds of millions of pounds in compensation to their annuity customers. The FCA is thrashing out the final details on the size of the bill with the two firms.
David Burnett is thought to be among thousands of customers who will receive letters early next year outlining how much they are entitled to. Some of those affected may have died, leaving pension providers to track down their relatives.
A spokesman for Standard Life Aberdeen says: ‘ We continue to work with the FCA to ensure the annuity review is conducted in a way that means customers get the right outcome.
‘This ongoing dialogue includes our approach to reviewing customer records and the calculation of any redress due as a result of this review.
‘We expect the annuity review to be fully operational during 2018 and will start writing to affected customers at that time.’