I’ve waited 17 years for pension British Steel won’t pay
I WORKED for the Park Gate Iron and Steel Company in Rotherham from June 1965 to October 1969. In 1967, it was nationalised into British Steel.
My pension contributions were 2 pc of my salary and were matched by the company, so the total value when I left was £376.
I should have received a deferred pension when I reached the age of 65 in February 2001 but, due to the many reorganisations at British Steel and my own house move, this did not happen.
In October 2017, I received a letter promising the deferred pension.
However, it was not until January 6 that I was sent a form asking for proof of my identity and my bank details.
In total, I have received 19 letters, responded with ten emails and made 11 telephone calls, but my pension is still not being paid.
I’m now 82 and have been without the pension for 17 years. Can you help? C. M., Glasgow.
Your letter illustrates how important it is to keep in touch with former employers and pensions when we move house. All too often, we tell our bank and the utilities, but forget this most important investment.
In your case, it could have been particularly difficult to keep track, as your former employer changed identity with such regularity.
once I got in touch with the British Steel Pension Scheme trustees, they acted quickly to sort things out.
The trustees wrote to you in 2001, outlining your benefits and your options for drawing them, but no reply was received. They tried again several times between February 2001 and December 2012 — however, the correspondence was returned unopened.
In 2017, the trustees tried once again to track you down and, this time, they were successful.
You chose to stay with the original British Steel Pension Scheme, which moved into the Pension Protection Fund.
The administration has passed to actuaries Barnett Waddingham. They have already sent you a back payment of almost £2,000 to cover those lost years since 2001.
In addition, you will receive an annual pension of £147, with the first payment on June 1, 2018.
As you pointed out to me, your pension was worth only £376, so you have already received your money back many times over — illustrating what a great investment a pension can be.
WE HAVE three life insurance policies with Abbey Life. The original policy started in 1983 as a £20,000 life assurance and a savings plan.
In order to maintain the level of cover, we have taken out two further policies. They have a current investment value of around £18,500.
We now understand it would cost £70 per month to maintain the sums assured.
We have chosen instead to make the policies ‘paid up’. The alternative would have been to take a surrender value.
Now, on reading the correspondence, it appears to me that the sums assured will expire in about eight years.
I am 72 and my wife is 75. We do not have children and neither of us is really in good health. We have some limited income, pensions and no debts. D. W., Surrey.
WHoLE- oF-LIFE policies mix insurance and investment.
In the initial years, when you are younger and insurance is cheaper, more money goes into the investment.
As you become older, the life insurance gets more expensive and money is drawn from the investment to help pay for it.
I took your question to two financial experts. Patrick Connolly, of adviser Chase de Vere, says the longer you live, the poorer value these policies become.
As you have realised, making your policy ‘ paid up’ simply means that you will continue to have some life insurance for a few years, but that the expenses will gradually whittle this away to nothing.
Mr Connolly says the surrender value is key. You say the policies have a current value of £18,500. Is this what you would get by surrendering them?
‘If so, it doesn’t make much sense to continue to pay everincreasing premiums for £20,000 of life cover when you could access £18,500 now and put this into a safe savings account,’ adds Mr Connolly.
Even if the surrender value is less than this, there may be an argument for taking the money now, so it is available when you need it.
Danny Cox, of Hargreaves Lansdown, says: ‘These policies are not good value for money.
‘The average cost of a burial funeral is just over £ 4,250, according to royal London, and so the combined surrender values of your policies — £18,500 — should more than cover this.
‘My suggestion is to cash them in, rather than leaving them paid up, and split the money between you in savings accounts or in a cash Isa in each of your names.’
The advantage of each of you having some of the money individually, he says, is that you won’t have to wait for estate administration to get hold of enough cash to pay any funeral costs.
You do say in your longer letter that you have a separate, fixedpremium policy with another company to cover your funeral expenses, but if there is enough in these policies to do that, then you may choose to take the Abbey Life money and regard that as ‘job done’.
The only likely scenario where you might want to maintain these policies is if either of you has a very short life expectancy — because they are written to pay out on whichever of you dies first.
Even so, you may want to take out the money while you are able to enjoy it together.