09 October 2009
A major pension provider has given faulty assessments to as many
as 7,000 people because of a computer error.
According to Aegon, its computer system failed to make a proper
record when people withdrew up to 25% tax-free cash sum from their
pension fund. This left the remaining funds overvalued by up to a
third.
The pensions affected are known as "income drawdown" pension
arrangements, and were taken out between 1995 and 2002. "Income
drawdown" allow people to withdraw amounts from their fund within
certain limits, rather than buy an annuity. They are usually aimed
at people with large funds, with most pension providers setting a
minimum fund value of £100,000.
An Aegon spokesman admitted that some investors would not
receive as much going forward as they had expected but would not
say how the company planned to compensate people.
The Aegon spokesman said the company would cover any costs
incurred.
