AEGON overpays drawdown customers

by Gill Montia

Story link: AEGON overpays drawdown customers

AEGON has admitted to a computer error that has led to 7,000 of its income drawdown customers unknowingly receiving overpayments.

No reimbursements will be demanded from savers, but those affected will see their income reduced.

The pensions, protection and investment firm says its system failed to accurately record whether pension savers took a 25% tax-free lump sum when they retired.

The error dates back to 2001 but has only recently been detected.

Staff have since been amending individual fund values and advising savers of the problem at policy review, or when a fund is switched.

However, around 7,000 customers are still unaware that they will be facing a correction that will result in a fall in income.

This group will now be notified by letter.

HMRC and the Financial Services Authority have been informed and customers who have inadvertently broken the Government Actuary’s Department limit on drawdown plans will not be penalised.