Ask Jessica

Fi­nan­cial trou­bleshooter Jessica Gorstwilliams is here to help you with your money prob­lems

The Sunday Telegraph - Money & Business - - Readers’ Letters -

Am I too late for pen­sion free­dom?

I in­quired of my pen­sion provider, Aviva, to take out my pen­sion pot as per the Gov­ern­ment’s new rules in 2015. I was told that I could not have it as I had taken out an an­nu­ity in 2002. Why can­not the an­nu­ity be can­celled and my money re­turned? Af­ter all, it is still my money and why then should they take it when I die? I am 77. It is only a small an­nu­ity.

DC, SOUTH YORKS Gen­er­ally the as­sump­tion in your let­ter that the un­der­ly­ing fund of an an­nu­ity is still ac­ces­si­ble to the an­nu­i­tant is mis­lead­ing. Sign up for an an­nu­ity and, af­ter any cool­ing-off pe­riod has passed, the money that bought it is usu­ally ir­re­triev­able.

Dif­fer­ent rules may ap­ply in some cir­cum­stances where small sums are in­volved but Aviva doesn’t al­low cash­ing in of its small an­nu­ities for var­i­ous rea­sons, mainly to do with com­plex­ity – for ex­am­ple, a customer’s health could be a sig­nif­i­cant fac­tor in de­ter­min­ing the amount they might re­ceive. If it has de­te­ri­o­rated since buy­ing the an­nu­ity this would be likely to re­sult in a lower value be­ing paid.

You had an Aviva pen­sion, from which, in 2002, you took £7,292 tax-free cash. The resid­ual fund of £46,376 was used to buy a life­time an­nu­ity pay­ing £3,350 a year in monthly in­stal­ments. This any­way puts it out­side the small pot cat­e­gory.

Nev­er­the­less, be­fore you wrote to me, an Aviva ad­viser had in­cor­rectly told you that you could cash in the an­nu­ity. Then this was cor­rected but the wrong in­for­ma­tion left you feel­ing un­cer­tain.

Aviva says that this was an iso­lated in­ci­dent where the call han­dler didn’t re­alise the pen­sion was al­ready in pay­ment.

Con­fu­sion may also have arisen in that the Gov­ern­ment did toy with al­low­ing peo­ple to take the cap­i­tal from larger an­nu­ities but it then back­tracked.

As it stands the free­dom to take pen­sion savings as a lump sum, which came into ef­fect on April 6 2015, usu­ally does not ap­ply to money that has al­ready been used to buy an an­nu­ity.

A spokesman for Aviva said: “We’re sorry Mr C was told the wrong in­for­ma­tion. While this was an iso­lated in­ci­dent, this isn’t the level of service we aim to pro­vide our cus­tomers. We’ve apol­o­gised and of­fered £200 as a ges­ture of good­will.”

Three weeks on though there was still no sign of the £200 and you had been told only by me, not Aviva, that it was be­ing of­fered. Aviva told me a let­ter had been sent but hadn’t ar­rived. You def­i­nitely did not re­ceive it.

Mean­while af­ter I spoke to Aviva again the money was sup­posed to have been paid into your ac­count. It wasn’t and when I asked why I was told it had been over­looked.

You say you can check if some­thing has been paid into your ac­count only by trav­el­ling 12 miles to the near­est bank branch as you don’t do in­ter­net or tele­phone bank­ing. You have checked now and it has in­deed ar­rived at last.

Aviva gave a reader false hope an an­nu­ity could be cashed in

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