NU compensates stakeholder pension customers

by Gill Montia

Story link: NU compensates stakeholder pension customers

Norwich Union (NU) has announced that it will be compensating some of its pension customers by around £300 each.

The insurer has discovered an error in its scale of administrative charges which means that some people who bought the company’s stakeholder pensions have been overpaying.

Stakeholder pensions were introduced in April 2001 under legislation that capped policy charges at 1% per annum.

NU says it has recently come to light that it has been exceeding this limit and therefore needs to set things right with around 34,000 of its pension customers.

Those who are already retired and drawing their pensions will receive their dues by cheque.

Pension holders who are still contributing to their plans will see their savings adjusted favourably to reflect the correction.

Acknowledgement of the error came after NU completed a routine review to ensure that it is compliant with the Financial Services Authority’s (FSA) requirement to treat customers fairly and the insurer says it has kept the FSA fully informed of its actions.

NU is one of the UK’s leading stakeholder pension providers and the compensation could cost the company almost £11 million.