Were you Mis-Sold a Pension by Aviva / Norwich Union?

The document DRN-3362896 details a complaint by Mr. J against Aviva Life & Pensions UK Limited (Aviva) regarding the poor performance of his personal pension plan and administrative issues, particularly concerning his address and National Insurance (NI) number details. Mr. J was shocked by the plan’s performance when he inquired about taking benefits as he approached 55, leading him to request an investigation and copies of all annual statements since 2000.

Background:

• Mr. J’s pension plan began on 8 March 1989 with Commercial Union (CU), later merging into Aviva.
• He experienced issues with the transfer of benefits from an occupational pension scheme (OPS) in 1989, which were not applied to his new policy. This was rectified in 1998 with redress.
• Aviva underwent several mergers and name changes, affecting the fund in which Mr. J was invested.
• Mr. J had moved residences, and Aviva continued sending correspondence to an old address, leading to communication issues.

Complaint and Investigation:

• Mr. J raised concerns about being moved to Aviva without consent and potential issues post-merger with Norwich Union.
• Aviva’s handling of Mr. J’s updated address was incorrect, leading to misdirected communications.
• Aviva’s final response letters (FRL) addressed the policy value and administration but failed to resolve Mr. J’s concerns satisfactorily.
• The Financial Ombudsman Service investigator found issues with Aviva’s handling of Mr. J’s address and NI number details and deficiencies in customer service, recommending £300 compensation for distress and inconvenience.

Ombudsman’s Decision:

• The Ombudsman upheld Mr. J’s complaint, focusing on Aviva’s failure in several areas, including incorrect recording of address details and NI number, leading to significant distress for Mr. J.
• The Ombudsman noted Mr. J’s behaviour during interactions with Aviva staff but also highlighted Aviva’s responsibility for the errors and its failure to resolve matters promptly.
• Despite Mr. J’s challenging behaviour, the Ombudsman found Aviva’s customer service lacking, particularly in its communication and handling of the complaint.
• The Ombudsman upheld the complaint, requiring Aviva to compensate Mr. J £300 for the trouble and upset caused, in addition to addressing overcharges on his plan.

The case underscores the importance of accurate customer data management and responsive, empathetic customer service in resolving complaints, especially when dealing with sensitive issues like pension funds.

The document DRN-4286739 outlines a complaint by Mr. C against Aviva Life & Pensions UK Limited (Aviva), represented by his independent financial adviser (IFA). Mr. C argued that Aviva provided incorrect transfer values for his personal pension over several years, affecting his retirement funding decisions.

Key Points of the Complaint:

• Background: Mr. C’s pension, invested in a with-profits fund, was set to allow 100% of the benefits as tax-free cash (TFC). Upon reaching his normal retirement date (NRD) in July 2021, the funds were moved into cash, with a guarantee that the fund value would not fall below the value at NRD.
• Issue: Between January 2019 and March 2021, Mr. C and his IFA received multiple notifications of the pension’s transfer value, which fluctuated significantly. By March 2021, the value had decreased to £29,853 from a previously quoted £35,878 in August 2020.
• Complaint to Aviva: Mr. C complained about the decreasing value, and Aviva responded by attributing the decrease to a lower final bonus compared to 2019 and 2020. Further correspondence revealed a flaw in Aviva’s methodology for calculating transfer values, admitting that past valuations had been overestimated.
• IFA’s Argument: Mr. C’s IFA argued that the incorrect valuations influenced Mr. C’s decision to retain the policy, leading to a perceived disadvantage as the final pension value fell by 15%. The IFA sought compensatory measures from Aviva for the flawed valuation methodology.
• Aviva’s Response: Aviva acknowledged the error in overvaluing the policy due to a flawed calculation method but argued that the retirement value provided a fair return, apologizing for the incorrect higher values quoted in the past but refusing compensation.

Ombudsman’s Decision:

The Ombudsman upheld Mr. C’s complaint to some extent, recognizing that Aviva’s provision of misleading valuations over an extended period led to a loss of expectation for Mr. C. However, the Ombudsman did not fully support Mr. C’s claim to the extent desired, noting that the evidence did not convincingly show that accurate valuations would have significantly altered Mr. C’s decision-making regarding his pension.

• Compensation: In light of the distress and inconvenience caused by Aviva’s failings, the Ombudsman directed Aviva to pay Mr. C £300 in compensation.
• Final Decision: The Ombudsman’s decision aimed to acknowledge the impact of Aviva’s errors while considering the evidence and arguments presented by both parties. Mr. C was required to accept or reject the decision by 16 October 2023.

This case highlights the importance of accurate financial valuations and the potential impact of misinformation on individuals’ financial planning and decision-making, especially concerning retirement funds.