A cancer survivor in his 60’s has won his battle over a mis-sold annuity after the Financial Ombudsman Service (FOS) found in his favour.
Before he was diagnosed, he was sold a standard annuity. However, he already had heart disease, polio, and was a regular smoker, which leaves us wondering how this happened in the first place.
Bad Deal from the Start
When buying his annuity, Wayne Davies, 62, bought an annuity from Prudential with £27,000 from his pension pot with Royal London. Neither of them asked him any questions related to his health, and so the quote of £17 per week he was provided with didn’t reflect his personal circumstances whatsoever. The quote more accurately reflected a healthy man with a life expectancy of 91.
It’s worth noting that because of his existing health conditions, if he had been asked medical questions and given an enhanced annuity, he would likely have received over a third more income.
Shortly after he signed the contract on this already inappropriate annuity, he was diagnosed with cancer. As he was still in the cooling off period for the contract, he contacted both Royal London and Prudential, but heard nothing back.
Cancer Sufferer goes Ignored
Mr Davies took his case to the FOS, who called on Prudential to give them documentation relating to the sale. When they did, it was found that Prudential were aware of Mr Davies diagnosis of cancer, and did nothing, despite knowing whilst he was within the time limits for cancelling the contract.
Nicola Hartley, Independent Financial Adviser at SM Financial Services comments:
“Annuities are a complex financial product for several reasons. There’s several different types of annuity, which are more or less appropriate for people in different situations. It’s a contract that lasts for the rest of your life, and if it’s a joint annuity, even longer.”
“Royal London was paid a commission for every person they referred to Prudential who then bought an annuity. This goes to show the kinds of conflicts of interest that exist in the industry.”
Seeking advice from an independent financial adviser (IFA) can eliminate the conflict of interests present in the industry. Because an IFA isn’t attached to any company, they aren’t a salesman, and focus on your interests, without receiving commission from an insurance company.
SM Financial Services are independent financial advisers, with expertise in retirement planning and pensions.