Mis-sold Annuity Claims

Is This You?

• Were you suffering from a medical condition at the time you purchased your annuity, which your financial adviser or pension provider failed to ask questions about?
• Was there a failure to ask you about your lifestyle habits, such as smoking and drinking patterns, before you took your annuity?
• Did your financial adviser or pension provider fail to inform you that a better deal may be available through an alternative provider?

About a Mis-sold Annuity

An annuity is one of the most common financial products that can be sold to a person upon their retirement. It involves the retiree using their pension fund to purchase an income amount, which will then be paid to them on either a monthly or annual basis for their lifetime.

The level of income provided by an annuity should be based on the average life expectancy of the person it benefits. There are certain medical conditions and lifestyle choices (for example, smoking) that can shorten average life expectancy. In such cases, the level of income received from an annuity should be of a higher amount to reflect the fact that the income may be paid for an overall shorter number of years compared to other people. This is commonly referred to as an enhanced annuity.

It is therefore of vital importance that any relevant medical conditions and lifestyle choices are fully considered and taken into account by the financial adviser or pension provider…

It is therefore of vital importance that any relevant medical conditions and lifestyle choices are fully considered and taken into account by the financial adviser or pension provider when considering annuity provisions. If they fail to do so, you could be sold the wrong type of annuity.

The following conditions and factors should be taken into account when an annuity is purchased:

• Heart conditions
• Diabetes
• High cholesterol
• High blood pressure
• Smoking and drinking patterns
• Cancer history
• and many others

There are also many others, including any conditions where hospital treatment or the taking of routine medication is required.

You could potentially lose thousands in income over the years if such factors are not taken into account, and you may have grounds for a No Win, No Fee claim as a result. Financial advisers and pension providers typically have indemnity insurance or other adequate funds to cover the cost of such claims.

The Open Market

It is also the case that different annuity providers will offer different rates of income. It is the right of the retiree to explore the open market to obtain the best rate available before committing to a particular annuity.

Statistics show that annuity income levels can vary by as much as 40%, and this highlights the importance of obtaining quotes from more than one provider.

In some situations, a financial adviser or pension company will not inform the retiree of their right to explore the open market. They will instead offer only their in-house rate or that of the company they are tied to. This can create an impression that there are few or no alternative choices available to the retiree and can lead to retirees missing out on better deals.

If you purchased your annuity directly from your pension provider and were not advised of your right to explore the open market for an alternative quote, you could be receiving significantly less income than what may have otherwise been available. Neglect Assist may be able to help you with a No Win No Fee claim if this applies to you.

If, when advising on an annuity, you believe a financial adviser or pension provider

• Failed to take into account your medical conditions
• Failed to take into account relevant lifestyle habits, such as smoking and drinking habits
• Did not advise of alternative options that may be available elsewhere.

or acted negligently in any other way, please get in touch with us for free, non-obligation advice, and we’ll call you back.

How Much Am I Entitled To?

If you have been mis-sold an annuity, then the level of income that you receive from your pension may be lower than what you were entitled to. You can look to recover a lump sum of compensation to reflect the level of income that you will potentially lose over the years.  Neglect Assist can investigate and advise upon the level of loss suffered and may be able to represent you in a no win, no fee claim.

The potential amounts that can be claimed are illustrated by the following hypothetical examples;

• Mr A has a pension fund of £100k and has sold an annuity which provides an industry standard amount of £4,200 each year. His pension provider failed to establish that he is a lifelong smoker and suffers from high blood pressure. He could have received £9,000 per year if this had been taken into account. Over a 10-year period, Mr A would lose income of £48,000.
• Mrs B has a pension fund of £50k and is sold an annuity directly by her pension provider. This provides an income of £170 per month. She was not informed of her right to search the open market for a better rate of income. She could have obtained an income of £230 per month had she gone elsewhere. Over a 15 year period, Mrs B will lose £10,800 of income.
• Mr C has to take daily medication for a heart condition. His annuity provider did not ask him any questions about this and gives him an income of £335 per month for his pension fund of £75k. Mr C could have obtained an income of £475 per month if his medical history had been taken into account. He is £140 per month worse off as a result and, in 12 years, would lose a total income of over £20,000.