Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below.
G.J. writes: Seven years ago I retired, having been told by Lloyds Bank’s pension managers Willis Towers Watson (WTW) that my pension from the bank would give me a lump sum of £90,000 and a monthly pension of £1,200.
Now I have received a letter from WTW which has turned our world upside down. It says the figures given seven years ago were overstated due to an ‘administrative error’.
It wants me to repay £45,000 of the lump sum and a further £50,000 which it says has been overpaid as monthly pension.
Huge, rich company: But its mistake left reader on medication
Tony Hetherington replies: When many pensioners struggle to meet day-to-day bills, I can only imagine what it must have been like to open a letter demanding that you find £95,000, on top of which WTW planned to cut your pension by about £500 a month.
You told me: ‘After 40 years of service, we took WTW’s figures on trust, never imagining that it could make such a fundamental mistake. We are at our wits’ end. I have had to seek medication for anxiety, and my wife is worried it will seek a legal charge on our home.’
WTW’s letter explained that it had ‘a legal responsibility to only pay benefits in line with a member’s entitlement’. Its only concession was to add that it would take into account any irreversible change to your finances that had been caused by its mistake.
But even this was hardly helpful. Simply having spent the money was not good enough. WTW told you: ‘If you spent the overpayment on a particular asset, for example a car, you can sell the car and use the funds to repay the trustee.’
Nor would paying off your mortgage give you any leeway, as WTW added that ‘you would have been required to repay your mortgage in any event’.
I asked Lloyds to comment, and it told me its pension scheme was operated by an independent company which had appointed WTW as administrator.
It added: ‘We recognise Mr J’s long service and contribution to the group, and the difficulty and stress that the discovery of this error with his pension is now causing.’
The bank is seeking a speedy solution. I also contacted WTW, and asked why its mistake should not be regarded as negligence, with WTW footing the bill.
The multi-national company would only say that it would make a compensation offer ‘once we have sufficient information’. In short, it would not put forward a figure until you revealed full details of your finances and WTW could see what you could afford to hand over.
If you had been thrifty in retirement, WTW would offer less compensation than if you had been a spendthrift and ended up in debt — which would be an absurd outcome that penalised you for being sensible.
What WTW did not say was why it should escape paying for its own negligence, so I repeated the question. WTW is a huge, rich company.
You and your wife are pensioners. Demanding £95,000 from you would have a massive impact. Writing off £95,000 from its own profits would barely be noticeable.
This time my question struck home. WTW has now said: ‘On this occasion, WTW have advised the trustees that we will make a payment to the pension scheme equivalent to the amount of overpaid benefits, and as a result the trustees have confirmed that there is no need for Mr J to repay any money.’
It may now be left to the Pensions Ombudsman to give a ruling on whether WTW can cut your future monthly pension, but you and your wife can rest easy in the knowledge that your home is safe. There will be no more demands for £95,000.
WE’RE WATCHING YOU
‘Expertise’: Yield Gallery’s Jon Sullivan
An art investment company linked to a convicted fraudster is facing a High Court winding-up petition after investigations by The Mail on Sunday and the Insolvency Service.
Yield Gallery Limited operates galleries in Soho and Blackheath in London, and has announced plans to expand in Dubai. Its creative director Jon Sullivan says: ‘With our expertise, we are able to advise, educate and help inspire new collectors and art enthusiasts seeking financial security.’
But last October, I revealed that Sullivan was previously known as Jonothan Piper. And under his old name, he was jailed for five and a half years in 2016 after pleading guilty to charges of fraud, money laundering and evading tax. Piper ran Embassy Wine UK Limited, which marketed vintage wine as an investment but cheated clients out of £300,000. Piper was also banned from acting as a company director for 11 years, but under his new name he had illegally formed two companies, an art retail business called YG Group Holdings and a financial intermediary firm, Jerry Peggy Limited.
Yield Gallery also employed as a salesman another disqualified director, Anthony Allen. He is banned from running any company until 2031, after he ran Global Neutral Limited, a scam firm which marketed investments in carbon credits.
No date has yet been fixed for the High Court to consider the winding-up petition, and the Insolvency Service declined to comment. However, lawyers for Yield Gallery said: ‘It is proposed to strenuously contest the petition’.
If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email tony.hetherington@mailonsunday.co.uk. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.