Annuity Claims

Hundreds of thousands of retirees could have been mis-sold annuities by pension providers

400,000 people have bought annuities every year since 2008

Annuity mis-selling payouts could total billions of pounds

Mis-selling has taken place because insurance companies have failed to provide savers with the facts

The Financial Conduct Authority (FCA) has stated that the rules have been broken on a major scale

Pensioners could be set for a massive windfall if their annuity was mis-sold


How were annuities mis-sold?

The FCA estimates that between 40-60% of savers purchased an annuity from a different company to the one which handled their pension contributions

They also estimate that 79% of those who stuck with their pension provider and purchased an annuity from them could have got a better deal

If you stuck with the same company, you may not have been made aware of this and may have been mis-sold

You also may have been mis-sold if:

  • Your provider didn't encourage you to shop around
  • You weren't made aware of hidden charges
  • You were in poor health but were given a standard rate of pension income
  • You weren't asked about your medical condition and history when you purchased an annuity
  • You were sold a single life annuity when a joint life annuity was more suitable
  • Your payments weren't set up to rise with inflation and you weren't given this option

Need to know

  • As many as 160,000 people per year could be have been mis-sold an annuity according to the FCA
  • If you spent £100,000 worth of pension savings on an annuity you could be due £20,000 in redress
  • If you were in poor health when you purchased the annuity this figure could be as high as £50,000
  • If you retired after 2009 and think you qualify for a claim you could have as much as 70% chance of winning according to some legal experts
  • The law states that you have six years from when the insurer mis-sold you to claim, meaning that you're much more likely to succeed within this time period
  • The annuity resale market (or secondary annuity market) will be in place during 2017

The inside track

  • Your pension is your life's savings, if you think you have a case to claim for lost income from a mis-sold annuity, try
  • When it comes to annuities, you have legal rights. The Open Market Option should have been presented to you by your insurer. This allows you to explore the market for the best annuity rates
  • Annuity rates vary as much as 40% between the best and worst providers
  • An estimated 33% of retirees don't shop around for the best rates when buying an annuity
  • If providers are determined by the FCA to have widely mis-sold annuities they will start to clamp down
  • Annuity mis-selling could be bigger than mis-sold PPI. Compensation could total in the billions
  • Pension mis-selling has been in the news before. In the 1980's thousands were mis-sold personal pensions based on risky stock market returns. Providers were fined in the millions for pensions mis-selling

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