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Equitable Life pension and Pension Credit
Hello everyone
I have a case where the client has received a letter from Pension Credit stating that he has been overpaid £10,500 as he has an Equitable Life pension. My client did not know he still had this pension after the company went bust and he never heard from either Equitable Life or HMRC (who apparently lost 1000’s of details of Equitable Life policy holders). My client happened to contact Equitable Life to see if they had any record of a pension and they wrote to him in Jan 15 to say he had but he could not have an annuity from it. He sent this letter to Pension Credit and heard nothing more until February 2016 when he received the overpayment letter from them stating that his notional income from this pension was £40.47 per week.
My client has just received the MR decision which reiterates that he was liable for this overpayment.
My question is - can PC treat this client as having this pension from 2009 (when it matured) to date even though he knew nothing of it/thought it had gone with the end of Equitable Life. He is happy to have it treated as notional now but not from 2009 as he only knew it existed in Jan 15.
If so, is the notional income calculated on the amount of the pension in 2009 or when he knew of it in Jan 15?
Many thanks
I’m lost! Isn’t notional income that which the claimant could have but hasn’t claimed - such as someone not claiming their State Pension, or not taking an annuity when they are able to?
In your case, you say claimant has been told he can’t have an annuity. So what does he have? Is he getting any income from this pension at all? Is there any way in which he could have done so if he had claimed? It seems to me (I stand to be corrected) that if he is not getting any income from it & can’t do so that he should not be treated as having notional income.
Having said that, I can’t understand how Equitable can tell him he has a pension but can’t take an annuity, unless they also tell him how he can access it.
All I know until I see the MRN is that he could have taken an annuity in 2009 but didn’t as he did not know he still had the pension. Equitable Life have told him that he cannot have an annuity now, just a lump sum. PC are treating him as having this pension pot from when it matured even though he did not know of its existence. Seems wrong to me…
Also he has had no income from this pension and is still waiting to hear from Equitable Life his options - only been told by telephone that he cannot have an annuity.
I don’t know how relevant this might be, but there was a government compensation scheme for those losing out on Equitable policies, which closed to most new applicants on 31 December 2015. Are they saying the client had no good reason for failing to apply for income before the deadline, therefore is treated as having it?
Though according to this FAQ:
“If you receive Pension Credit and are therefore eligible for the additional payment from the Scheme, you can contact them until 30 April 2016”
The Equitable situation was very complex. Some of the funds? clients? pensions? were passed to Prudential - I have a client getting such a pension from them. There was/is also a compensation scheme funded - I think - by Government, under which annual payments have been/are being made. However, I suspect the may have been other cases which didn’t come under either of the above.
If your client was genuinely not informed by Equitable (or anyone else) in 2009 then I think he should try to get confirmation from them that they did not contact him, and why they did not. This would be evidence for an appeal (which I assume you will be making anyway - I agree with your view that what DWP have decided seems wrong, provided your client is credible. Of course, PC rules include that claimants will be assumed to have an annuity if they are entitled to it, even if they are not drawing it but I would hope that would not be applied if the client genuinely did not know he was entitled to one.).
What did he get in the letter from them in Jan 2015? Did it just say he couldn’t have an annuity? (You later say this was on the phone.) If so, what did he do to find out how he could access the fund? Did he ask then what his options are, & is he still waiting to hear - or did he only ask much later?
Incidentally, I can’t understand why he couldn’t have an annuity - perhaps he should ask for an explanation of the reasons.
We need to know more of the facts here. EL’s compensation scheme closed to new applicants in at the end of 2015 but there are policies which continued to exist without meeting the terms for compensation.
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Incidentally, I can’t understand why he couldn’t have an annuity - perhaps he should ask for an explanation of the reasons.
Equitable Life does not offer annuities, they point people to Canada Life. That means, I suspect, that he was told that he could only get cash but that doesn’t stop him buying an annuity from Canada Life, or elsewhere, with that money.
The client has just posted some papers to me. He was living abroad in different countries until 2004. In 2000 he heard of the Equitable Life collapse and wrote to them but never received a reply (he was living in Canada at this point). He claimed SRP & PC in Nov 2014 and in late 2014 heard on the radio of the government compensation scheme. He wrote to Equitable Life and received a reply in December 2014 that he had a pension pot with them. He received details of the pot in January 15 and sent this to PC who didn’t contact him until February 2016. The letter from Equitable Life dated 26/01/15 states that the value of his plan was £58,266.66 with a selected retirement date of 25/11/2019. He is still waiting to hear his options with regards to this pot.
PC in their MR dated 08/04/16 state that he had the private pension from 25/11/2009 (this was the earliest date that he could have taken his pension; age 60). PC have at least based their calculations on the value of his policy as at 25/11/2009 which was £39,946.33 and that his annuity would have been £175.38 per month.
Thanks everyone
I think he’s got a reasonably good case to say that he couldn’t be reasonably required to disclose something which sounds reasonably likely that he didn’t know about until he wrote to EL in 2014. Any evidence from EL about correspondence/contact or lack of from earlier on could help strengthen his case of course.
However, you say he only claimed SPC from 2014 also - is this a typo, as your original post said they’re asking for £10k on basis of notional income of £41.47 a week i.e. going back to 2009.
Sorry typo for 2014, should be 2009.
not directly related but just this morning I have spoken to a client who I advised to claim PC , he was on ESA and had an assessment due that he did not want to go through with] PC seemed to be a simple option , however he called me today to say pension service will not pay him any PC until he has provided details of an occ pension from 1990 which my client says he had no knowledge of, the company went out of business but another one, Phoenix I believe took over the policy, my client is having the devil of a job getting Phoenix to come up with any details as they say they have no record of my client on their system. I feel guilty as I advised my client to claim PC and now he is without benefit income until this mess is sorted out. any suggestions please.
not directly related but just this morning I have spoken to a client who I advised to claim PC , he was on ESA and had an assessment due that he did not want to go through with] PC seemed to be a simple option , however he called me today to say pension service will not pay him any PC until he has provided details of an occ pension from 1990 which my client says he had no knowledge of, the company went out of business but another one, Phoenix I believe took over the policy, my client is having the devil of a job getting Phoenix to come up with any details as they say they have no record of my client on their system. I feel guilty as I advised my client to claim PC and now he is without benefit income until this mess is sorted out. any suggestions please.
DWP Pension finder any help?
Otherwise, surely if Pension Service has evidence of this pension being able to be realised by your client, they can provide details of how he could do this? Kerr principles etc?
I used this service for a client and we received a response from the pension company straight away - not sure if we were just lucky as haven’t used them since!
Thanks Red,
The PC folk tell me that some of these pensions have been sold on and could be anywhere now !!!
Just had a call from a decision maker @ PC who has agreed to write off the overpayment as they cannot prove that the client misrepresented when he made the original claim for PC - they have been unable to retrieve the tape! This might help you SocSec!
Just had a call from a decision maker @ PC who has agreed to write off the overpayment as they cannot prove that the client misrepresented when he made the original claim for PC - they have been unable to retrieve the tape! This might help you SocSec!
Nice one, well done.