I asked for my payout – then Friends Life cut it by £17,000

FRIENDS LIFE provided a valuation on my pension in July, giving it as £40,882.82. I took advice and was told the best option would be to cash it in because an annuity would not be suitable for me.

In September, the fund was valued at £39,212, which I put down to market fluctuation. Friends Life kept banging on about an annuity and other options but I maintained I wanted to cash it in.

I then started a new job that meant I would have to pay much more tax if I took all my pension as cash, so I contacted Friends Life and said I’d just like my 25 pc tax-free lump sum.

The next quote I received, in October, was £23,992.98. Where has my other £17,000 gone?

While all this had been going on, I was sent five packages all relating to an annuity I never wanted.

Mrs S. P., Leicester. I hAVe excellent news for you. The quotation you received in october was a mistake. your fund value is £40,592 — a fact that Friends life has confirmed to you in writing.

Friends life also mistakenly sent you duplicate information, which partly explains the plethora of packs you received. A spokesman says the retirement pack outlines all the options, including the new pension freedoms. It also signposts you to pension Wise and the Money Advice Service, and emphasises the importance of seeking financial advice.

you have indicated that you are interested in a drawdown option that would allow you to take your pension gradually and thus mitigate potential tax liabilities. Friends life says one option would be to transfer to the consumer platform of its parent company, Aviva.

But there are other options. An independent financial adviser would be able to point you towards the most suitable based on your personal circumstances. IN MAY 2012, I took out a six-year stock market bond with Santander.

I said at the time that I was in poor health, but I was cajoled into taking it.

Now Santander has relented and released my bond, but it refused to pay i nterest for the past threeand-a-half years and will also not entertain compensation.

N. H., Bournemouth. SellInG a six-year bond to someone who is in poor health is beyond the pale.

So why did Santander refuse to entertain compensation? Well, it seems it was offered. Santander’s records show you made contact in november 2014 asking to surrender the bond due to poor health.

your complaint was upheld and redress offered — and you were told you could surrender the bond without penalty. But a spokesman says: ‘For reasons unknown to us, he did not accept the offer and chose to leave the bond in place.’

I suspect your poor health may have played a part in this and you may have been too busy or simply mislaid the letter.

Santander says you approached them again last year looking to close the bond.

As nearly a year had passed, the offer would normally have lapsed. however, due to your health and as a gesture of goodwill, it agreed to the surrender.

This is when you complained about there being no interest payment. you have now accepted Santander’s november 2014 offer of £1,546.33 redress along with £100 for distress and inconvenience from being sold a product that was not right for your needs.

The redress is based on what your money could have earned had you not taken the advice.

your bond capital of £40,000 was paid out separately. AFTER serving in the RAF for 30 years, I entered the Christian ministry and retired at the end of August 2014 as I approached my 74th birthday.

For many years, I had an RAF pension and a stipend operated from two different HMRC districts. I had problems getting the right tax code, so engaged an accountant.

He retired in 2012 and handed over his business to a firm that has dealt with me at a distance for the past couple of years.

When I planned to retire, I informed my new accountant, who told HMRC. I then received four tax codes from two tax districts, all of which allowed for a full year’s ministerial allowances. My accountant queried this and other tax codes were issued.

I am now told that I owe HMRC £926. My accountant says this is because I was given an excessive expense allowance in my original tax coding. Even though my accountant informed HMRC t he codes were wrong, an underpayment had built up.

We did not ask HMRC to make a full yearly allowance for my expenses and it was informed of my planned retirement.

Rev D. W ., address supplied. AS WITh many retired people, your tax affairs are rather complex.

While I have a great deal of sympathy for your predicament, it looks as though on this occasion hMrC has got it right. hMrC says it did not learn of your change of circumstances until october 2014, and it did not know you were receiving a pension from the Church.

your case became more complicated as your agent asked hMrC to swap codes between your rAF pension and your employment. he then called back the same day to say you had retired, so hMrC allocated your personal allowance back to the rAF pension.

however, the code from the first call was still issued and it seems this was used by the Church against your pension there — it has the same payroll number as your job.

So, yes, you did receive too much allowance, but it feels to me this has as much to do with your accountant muddying the waters as to anything hMrC has done.

There is a window for collecting underpaid tax and hMrC’s request falls well within this.

however, the good news is hMrC has agreed to allow you to pay the money back over a few years, if this will help at all. Someone will contact you directly to discuss this.