Questions of Cash: 'Can I really be charged an £840 fee from 1994?'
Saturday 09 May 2009
Q. I was sold a Legal & General Personal Pension plan in 1993 by Nimmos of Clacton, which I believe was processed by Pensure Financial Management. When I changed jobs in 1994 I joined my company's final salary scheme and was told I couldn't have two pensions. I stopped contributing to my personal pension plan and took out an AVC [additional voluntary contributions] policy with L&G, linked to my employer's pension. When I left that job I had to stop contributing. I have now received a summary statement from L&G for my personal pension plan, which shows management charges of £842.86 deducted from the plan. L&G tells me that because the plan had less than two years' contributions it is charging a management fee dating back to its inception. It says I could have transferred this policy to my AVC, avoiding the management charge. L&G says it could not inform me of this as it did not provide financial advice to me and acted on behalf of Pensure. GB, Essex.
A. L&G was required to impose a charge at the point of termination of the plan. This would normally have been levied when the plan matured at your retirement. But L&G made a significant overcharge: it took £842.86 from the fund, when it should have been £423.82. In addition, your complaint led L&G to look again at your old AVC plan, which is now revealed to hold a further £339 in value. To avoid generating further charges, you could leave this AVC plan alone until you retire, when you can take the full matured value as a lump sum. L&G has sent you a payment of £100 to apologise for its errors, which originated in mistakes when your pension plan was set-up. Mike Connolly, a spokesman for L&G, says: "It was quite a surprise to us that these plans were set-up wrongly in the first place. We have now conducted a review of other plans set-up around this time." But L&G has not found similar errors on other customers' accounts. You are now nearly £1,000 better-off as a result of your complaint to 'The Independent'. We have been unable to get anywhere regarding the allegation of misleading advice. We spoke to Nimmos of Clacton, which referred us to Pensure. Pensure insists you were not wrongly advised, but refers any complaint to Nimmos. We strongly recommend you take the matter up with the Financial Ombudsman Service.
Q. I have a large deposit in Nationwide's Members ISA Bond, which is now paying 0.65 per cent. This is poor compared to other ISAs. Why is Nationwide paying such a low rate of interest? Given the problems with other building societies, I don't see why it should not convert to a PLC. With savings rates this low, what is my benefit as a "member"? And Nationwide has begun charging for withdrawals in other countries, so the FlexAccount is no longer particularly attractive either. SG, Kent.
A. The best ISA bonds at present, according to MoneyFacts, are the West Bromwich Building Society's one-year E-Bond, which pays 4.3 per cent gross, and the Chesham Building Society's five-year bond, paying 4.5 per cent gross. So not all building societies pay poor rates of interest. And you could earn a higher rate of interest staying with Nationwide if you switch to a longer-term fixed rate ISA bond, paying up to 3.25 per cent. There is no penalty for switching from Nationwide's Members ISA Bond to its longer-term ISA bond. While many banks and some building societies have hit trouble, the Nationwide has been resilient and rescued three weaker societies. A spokeswoman for Nationwide says: "We firmly believe that a strong and robust mutual sector is good for the consumer and the economy in the UK. Nationwide remains committed to mutuality." She says that while Nationwide has now started passing on Visa's currency conversion charges abroad, this only applies outside the Visa Europe region. Its cards are commission-free internationally.
Q. Last July I booked a hire car with Hertz, using eBookers loyalty points. eBookers sent me vouchers for a car it booked for me at Heathrow's Hertz. At Heathrow, my wife and I took the Hertz courtesy bus out to its depot to collect the car, but the desk said there was no car for us and it had no record of the booking. I phoned eBookers, which insisted the booking had been made and Hertz must provide us with a car as paid for. Hertz refused to do this. I phoned eBookers again. It insisted the booking had been made, that it could do nothing about this and I should rent a car from Hertz and complain to eBookers when I returned. But Hertz had no cars available and I had to book with another company. I wrote to eBookers on my return. Two months later I got a reimbursement cheque from eBookers for the hire car, but no compensation for the inconvenience, nor any apology. I complained, but was told I could either have the refund, or the refund of my points, but nothing more. Hertz made its own investigation, advising me that eBookers had cancelled the booking. It promises me a free car hire booking in the future, even though it was not at fault. JC, by email.
A. eBookers has now agreed to refund the points and the cost of the hire car. It also apologises.
Q. I used thetrainline.com website to book tickets from France to England. Owing to a fault on its website, when I asked for travel insurance it repeatedly requested my name and then deleted it. It then said it was unable to complete the transaction, so I booked by telephone. But it later emerged that charges were processed of £121.60, £1 and £89.65. I have had neither a reply nor the courtesy of an acknowledgment to my complaints. PT, France.
A. The trainline.com apologises and accepts that your complaint "was slightly delayed". As it took a month to obtain the refund, and only after our intervention, it is a matter of opinion whether the delay was "slight". It aims to process refunds within 10 days.
Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: email@example.com
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