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I am trying to get some good advice regarding my pension provider Aviva, who blundered because they were going to contract me back into State second pension (S2P) in 2005 via a letter they sent me during that period, but then failed to do this.
In recent years the national insurance contributions office sent payments to Aviva for years 2008 & 2009 because i was contracted out, which was unbeknown to me until I received a statement receipt this year.
I have since complained to Aviva about the situation, they investigated and replied, stating that I had not inccurred any financial loss as I had previously suggested when I complained. Whilst the their contracting-back letter in 2005 should not have been sent to me as it was a pilot project for certain customers who had payed contributions for three to five years. Adding, that nothing had been sent from 1996 to 2005, only 2008 onwards. However, charges have been made as I had not achieved a 100% unit allocation rate into my policy, only 96% thus inccurring charges as they take the difference as a charge. The total value of my payments for 2008 & 2009 was £2,451.45 invested in with-profits fund. They state that these combined years are at a are current value of only £2,260, a difference of £191.45. I am aware that it will go up towards retirement, but it could be anything !
They have offered to send me a cheque for £100 as a way of saying sorry for what has occurred, but I am required to respond by 15th Sept. 2009, for them to do this. If I accept then their it will be final settlement of my compliant.
I do feel that is acceptable as I should have been contracted back into S2P, it is what I would have wanted to happen in any event. According to on-line Which?, in most cases, the growth rate is 1.9% above earnings inflation (assuming pension provider charges of 1% a year) If earnings inflation is around 4%, this means you need 5.9% investment growth in a contracted-out policy just to match S2P.
I know this is sounding a bit complicated and 'long winded', but I feel that I should not be paying charges for their mistakes, as I should have been contracted-back in to S2P.
What would be the best action take ?
In recent years the national insurance contributions office sent payments to Aviva for years 2008 & 2009 because i was contracted out, which was unbeknown to me until I received a statement receipt this year.
I have since complained to Aviva about the situation, they investigated and replied, stating that I had not inccurred any financial loss as I had previously suggested when I complained. Whilst the their contracting-back letter in 2005 should not have been sent to me as it was a pilot project for certain customers who had payed contributions for three to five years. Adding, that nothing had been sent from 1996 to 2005, only 2008 onwards. However, charges have been made as I had not achieved a 100% unit allocation rate into my policy, only 96% thus inccurring charges as they take the difference as a charge. The total value of my payments for 2008 & 2009 was £2,451.45 invested in with-profits fund. They state that these combined years are at a are current value of only £2,260, a difference of £191.45. I am aware that it will go up towards retirement, but it could be anything !
They have offered to send me a cheque for £100 as a way of saying sorry for what has occurred, but I am required to respond by 15th Sept. 2009, for them to do this. If I accept then their it will be final settlement of my compliant.
I do feel that is acceptable as I should have been contracted back into S2P, it is what I would have wanted to happen in any event. According to on-line Which?, in most cases, the growth rate is 1.9% above earnings inflation (assuming pension provider charges of 1% a year) If earnings inflation is around 4%, this means you need 5.9% investment growth in a contracted-out policy just to match S2P.
I know this is sounding a bit complicated and 'long winded', but I feel that I should not be paying charges for their mistakes, as I should have been contracted-back in to S2P.
What would be the best action take ?
