Pensioners may be entitled to compensation
The misselling of annuities could lead to an increase in compensation from people who purchased pension products.
An investigation carried out by the Financial Conduct Authority (FCA) found that a number of people were missold annuities between 2007 and 2013 – opening the door for a rise in compensation claims.
It is estimated up to 100,000 people per year could have been sold the wrong products and could now seek financial redress.
The Daily Telegraph reports the investigation has focused on the sale of lifetime insurance products but many people may not have been given the correct annuities to take account of their medical conditions.
According to the newspaper, insurance company Aviva has already identified 250 cases where its staff had failed to ask key health questions when recommending products.
The statement from the company said: “We identified, as part of our normal review of customer policies, an error in the sales process for a small number of annuity customers.
“As soon as we identified this we put measures in place to address the matter. We are now in the process of contacting around 250 customers who were affected to ensure they are put in the same financial position as they should have been, had the error not occurred.”
The statement added that the compensation had been relatively small.
A spokeswoman for the regulator said: “We have been conducting a review of the non-advised annuities sales practices by pension providers, and expect to publish our findings later this year.”
It is expected the government and Treasury will be conducting a full review once the FCA releases its report.
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