Aviva payments are taking forever

I am writing to see if you can help get an annuity set up so I can begin receiving my pension. I wrote to Friends Life, part of Aviva, five months ago, and then again a month later.

I was hoping to get the ball rolling early, but it turns out that I probably should have begun the process a year ago. STEVE FOULIS, KENT

You contacted Aviva requesting a quotation showing what you might expect to receive from your pension when you retired in five months’ time.

It seems the customer adviser thought you wanted an illustration rather than what you were asking for.

Aviva explained that an “illustration” uses “generic FCA standard rates to give customers an idea of how much annuity they might expect to receive”. A quotation, it said, is based on “current information specific to the customer’s individual fund and annuity and uses guaranteed annuity rates if the customer has safeguarded benefits”.

This misunderstanding resulted in a delay in getting the relevant information and forms to you.

The total fund value quoted had fluctuated over several months until, by your birthday, it was worth £112,191.

Aviva’s bonus rates for with-profits policies may go up or down.

Aviva emphasised that this type of policy is not designed to reflect market movements on a daily basis, but rather the investment conditions over the entire term of the policy. Bonus rates factor this in.

In the meantime Aviva offered £200 compensation in respect of its slowness.

Only further to my involvement, though, was the annuity set up and £2,097 paid to include sums backdated from your retirement date plus an extra £500 for goodwill.

An Aviva spokesman apologised for the delay and said its service fell short of its usual standards.

Despite all this, the following month’s £700 pension payment failed to appear in your account.

You alerted Aviva and this was resolved. A further £150 was added for compensation bringing the redress in all to £850.

However, there remained a problem over the actual timing of the monthly payments.

These did not tie in with your outgoing direct debits, which had been set up in anticipation that the pension would be coming on the first, or thereabouts, of each month.

This mismatch was a by-product of the delays of Aviva’s making. When the pension was at last set up, the first payment was timed to arrive on the fifth of that month, setting the trend for subsequent ones. This, with more prodding from me, has now also been remedied.