The Scandal of a possible another 'Equitable Life'

We may have uncovered a serious problem, after information from an informant, about operations at Scottish Widows - the pension company.

People cannot get refunds, possibly even if their pensions have been mis-sold to them.

There may be a "black hole" in the accounts of Scottish Widows - the matter is still being investigated.

One hopes and prays not, because there is an enormous amount of money at stake, and one hopes that the owners, Lloyds TSB plc, will cover any deficit if there is a "hole in the accounts" for real.

We'll keep you posted. Further update later tonight.

EVENING UPDATE - WORRIES FOR SCOTTISH WIDOWS INVESTORS



The investor says they invested many thousands of pounds into their pension from their job when they were in their thirties.

The investor has fallen upon hard times, and tried to get his money out.

From a peak value of £11,000 the investor has seen his investment tumble to just over £7,000 in value but now Scottish Widows say they can only release £644 a year to him, in 25 years time.

The investor says he was totally unaware he couldn't pull out if things went wrong with the pension, which clearly has gone very wrong indeed.

However, making matters far more serious for Scottish Widows, and more worrying still for the investor, he has kept all the documents going back years, and as he watched his investments crash by thousands of pounds, he notes that 4 of the statements did not contain any financial figures at all.

The letter said "Your printed balance is enclosed", and there was the Statement of Account, and (we have seen these documents); it said "BALANCE £ "

We have seen at least 4 such statements, where no balance is shown.

Then, a letter was sent to him to say his investment had actually crashed by over £3,500.

Then, he was told he couldn't get a refund, but he wasn't explained this properly when he took out the pension, so he is totally devastasted by the matter, and has no money and says he is "short of food and the provisions he needs to survive."

The statements said "£ " (showing nothing), and now they say he cannot "get out". So where has the money all gone? Where has all the money gone Scottish Widows?

What will Gordon Brown do about the law, urgently, and what will happen to this now impoverished man?

Ok

SOURCES?


Secondly, in most pensions in the UK just like Whole of Life Endowments the pensions CANNOT be paid out until the person reaches retirement age (or the age of the pension fund term end)

This is the same for ALL pensions in the UK.

When you buy a pension, you are actually buying nothing, and usually the pension provider as in this case Scottish Widows never pays you a penny from their own money when you do retire.

Very simply this is how it works.

You sign up, just pay in your agreed amount from your pay check, that portion of your pay is paid to the pension fund before it is taxed (pensions (payments not payments at time of collection) are tax exempt (with some limits).

From the initial sign the company will pay its representative or the introducer/adviser the commission. And also add on an "Administration fee" for the paperwork and back office costs. The paperwork sent in the post afterwards, and signed at the time clearly always states redemption of the policy cannot take place until retirement or death.

Therefore usually for an average worker in the UK they will have paid NOTHING or a very small amount into the fund for a couple of years, it all goes to pay for this.

Then you work for another 30 odd years paying into this provider. Depending on the type of policy you agreed to, i.e. ethical or green or just profits, this money you pay monthly is added to millions of others who also pay monthly.

This goes to a Fund Manager (who control much more wealth than hedgies etc) who then has this pot of £x coming in from 3 million people a month. This is then invested in a MIX of things depending on the fund, usually around the following 1/3 property 1/4 stock market 1/4 currencies etc.

Due to the amounts of money involved it is hoped the investments will get a good deal, and as it’s in bulk the operating costs are lower.

These funds then get the profits from these investments and are then put back into the pot to buy more things.

When then your term of policy comes to an end you have 2 choices.

Whatever your investment over the time is now worth as the % of the fund can be collected as a cash sum , but that is taxed as income and capital gains tax etc and do what you like with it.

Or you opt to have the pension pay you monthly. What most people don’t realise though is that the Pension fund pays you nothing, even if it shows up as Scottish widows monthly. They will take the amount you now have as a percentage of the pot and take the cash (supposedly from the profit made by profits being reinvested every month and increasing the size of the fund) and buy an ANNUITY with it from a different provider.

An annuity can be bought by anyone at anytime and has nothing to do with pensions at all, it is just an instrument used to pay them.

You approach an annuity provider and say I am male aged 65 (or 21) years old I have £150,000 to buy an annuity. They will then like life insurance companies underwrite the risk using stats, and say okay if you give up that we will pay you £x per month until the day you die.

As nearly all pension funds had at least 5% and usually about 20-30% invested in property (including commercial) in the UK and stocks and shares, and currencies, well it is no surprise that EVERYONES pensions are not hitting the projected payouts.

There is no conspiracy here, except for the broad way the system works, and the bankers affects on peoples lives. The statements should have an amount on them, however if a projection on future annuity incomes could not be made because the Fund was in loss at the time, well they cant show a figure, and they are not allowed to show £0 as it is a projection which would be misleading as its stating an amount of payment at 0. Just old rules on paperwork don’t allow it, to show a £0. Also if he looked in the early years of the policy as he had not contributed to the fund, but was just paying the commission and admin fees, well there is no income to show as he has made no investments yet!

If he was miss old the policy tell him to contact

Financial Services Authority

Also on the paperwork they send him each year will be a contact number for the relevant Ombudsman who can investigate claims of miss selling, and get his money back. Especially if he opted out of SERPS ( the government pension, his proportion of his National Insurance for Pension when past retirement age, being paid during working life not from his income to the government for their pot, but going to the pension provider... Thank you Margaret Thatcher for making our pensioners cold and hungry, and the bankers and Fund Managers multi multi billionaires!)


Kind Regards,

Elf


[edit on 10-3-2010 by MischeviousElf]

We cannot reveal our sources at this stage.

But as soon as we take action on their behalf, having seen the evidence, we expect the man to be paid his £7,000 within 14 days.

That's assuming Lloyds TSB, have 'got the money'.

[edit on 11-3-2010 by TheDailyPlanet]

WORRIES FOR CASH LIQUIDITY - MAYBE, AT LLOYDS TSB PLC




I have just been handed the relevant paperwork by a colleague, I act as Editor, and it contains the documents where the balance is just shown as "£ " as the total balance, and it does make the person looking at their statement, wonder whether their account has been flushed of ALL it's funds, which creates enormous worries. The informant has agreed to the publication of one of the documents, later in the night (GMT 2313hrs is time now).

Surely this is an outrage, a terrible worry for this saver, and huge numbers of people throughout the UK.

All other figures are left blank too, and it does show sadly, the possibility of false accounting, which I think would only ever be employed by a larger organisation like Lloyds TSB plc, if they're in trouble.

We have a contact at the Bank of England, so we will send them an email in an official capacity, to check that everything is alright. It really is a worry. Thank God I don't have an overdraft, and bank with a different bank, Barclays Bank PLC, who I know to be very, very sound indeed.

[edit on 11-3-2010 by TheDailyPlanet]

Here is one of the statements seen, typed out for all to see:-




Your investment funds

The value of your plan on 6th June 2009 is shown below

Total fund value £

Transfer value £

We will start to switch your fund(s) across to the Cash fund 3 years from your retirement age.

The total fund value includes an amount of [no figure shown either]

Value if you had transferred on 6th June 2009 £ (nothing).

An overall gain was made for this statement period of £, after the deduction of the annual fund charge.

Value if you die

Value on 6 June 2009 £

Government rules may require that part of the value on death from any transfer payments must be taken in the form of a persion for your husband, wife or dependant. If you die before you take your benefits, any tax-free lump sum death benefit will be restricted to your available Lifetime Allowance at the date of your death. Dependant's pensions may also be provided in addition to any lump sum death benefit. These benefits will not be tested against the Lifetime Allowance. Please refer to the Important Notes for more information regarding the Lifetime Allowance.



Payments into and out of your plan and charges [shows nothing]

Payments into your plan during this statement period [shows nothing]

You get tax relief on your payments at the basic rate of income tax. We will claim this tax relief for you and add it to your payment(s). If you're a higher rate taxpayer, you can claim the balance of tax relief from HM Revenue and Customs through your self-assessment tax form. You don't get tax relief on payments in excess of your total earnings or on transfer payments.

Payments into your plan :- No payments have been made.



The last time he had been sent a statement, showing a balance, it was showing just under £10,000.

Now the investor said he was terribly concerned because it showed no figures, 4 months in a row.

Then, they wrote, to tell him his investment had crashed by over £3,500.

It all looks very very fishy, and these issues are currently of massive concern to huge numbers of people around the UK.

Don't you think it outrageous that 4 of the letters had the figures totally blank (very, very suspicious), and then he is sent a letter to say his investment had crashed by over £3,500 ?

Thank you for your post MischeviousElf, this is blatantly a case of mis-selling of the most obvious kind, and we will of course contact the Financial Services Authority.

We expect this man to be paid HIS money, within 14 days of TheDailyPlanet requesting it (we have not sent our official request on his behalf yet). Assuming Lloyds TSB have still 'got the money'.

Because I am worried there is an enormous "black hole", there is evidence of false accounting or fraud by Lloyds TSB plc. If they have a problem, which I think they do, they may have been planning for example to plug the deficit by means of income from retail banking rip off unauthorised overdraft charges etc.

This way they have over 15 years to bridge their black hole deficit, presumably gambled away on the international "contracts for differences casino" (I've been there, I lost just under £1,000 in 24 hours), so that they can pay this man a measly £644 a year, then, which he couldn't care less about.

Some days, this man has been going without food (TheDailyPlanet has paid him £20 for this story so he has some food now lol), going without cigarettes etc. because he is desperate for a refund on his mis-sold pension.

Meanwhile, I heard on the news that bankers are set, again, to receive multi-million pound bonuses.

We have not contacted the Bank of England yet to see if there is a serious liquidity problem at Lloyds TSB plc (I have a friend who works there).

I would be interested to hear from anybody else who is experiencing nightmares with Scottish Widows. I think that the division may now be effectively bankrupt.

I don’t have enough breadcrumbs to get home.

litmuspaper, I hope you are ok. I am very fortunate to have cash, Mastercard, savings account, and other accounts etc. If in dire need at this time, send me a pm. I know that the local bank branch is OK for my bank.

We are taking this matter up for the informant on Tuesday. Halifax keeps coming up in conversations on websites like moneysavingexpert as really worrying, with ads that look so good, and then fees of over £100 a month to maintain their accounts once they have entered the red.

We have visited the branch, and the branch manager was flustered but helpful. However, when she actually sees the documents, I think unfortunately she may find that the case against the bank is unfallible.

However, this is not her department.

The case is that the documents show £ with absolute no figures after it month after month.

There have not been difficulties withdrawing money from this bank to date, and it's a very tricky business, because a scare on this bank, may very well create a bank run, which has to be avoided.

But in sadness, it is the opinion of TheDailyPlanet that Scottish Widows has run out of funds. It is our advice not to invest with Scottish Widows.

IMHO even if Scottish Widows has 'run out of money' we have the FSA. More importantly LLoyds affiliation will be via an umbrella group scenario whereby they would not be liable for the losses directly, I would have to see the subsidiary paperwork on this to be wholly satisfied, however.

FSA - TO ALL LLOYDS DEPOSITORS/ACCOUNT HOLDERS - fear not each individual is covered up to the tune of 50k (gbp) be it ISA's, current account or deposit.

I appreciate the heads-up on a potential bomb daily planet but almost fuelling a run on accounts would seem counterproductive....

True, true. But it's really not on is it, you start to wonder if they feel they are "covered" by retail banking charges on unauthorised overdrafts etc.

I have never had problems with Natwest personally, and Barclays have been brilliant. I ran into difficulties a few years back, and they kindly agreed to reschedule the debt, as well as helping out with the unauthorised charges which they refunded, when they saw that the business was at that time facing cashflow problems.

Many people have got into big debt as the relevant banks effectively exhort money to satisfy their own gluttony. Little do they appreciate the damage this greedy attitude has on some of their customers, some of whom, sadly, have commited suicide due to the debts created for them by the banks in question effectively exhorting money on recurrent accumulating rip-off unauthorised overdraft charges etc. Meanwhile, the CEOs of the particular banks have been awarded with multi-million bonuses and their senior staff etc. - WHY are the exhorted overdraft charges still being charged?

Pensions scemes are just a massive scam.

Same as that life cover for over 50's

they always take more money than they give you. they can go bankrupt and leave you with nothing. if you stop paying it, then you lose everything you have already paid.

Why not just save up money yourself?