I was recently contacted about this issue by Doug Brodie, founder of Chancery Lane, a business that specialises in retirement income planning.
He recently intervened in the case of a terminally ill man whose wife was trying to access his pension early so that there would be money available to pay for his funeral – he only had days to live. She had turned to Macmillan Cancer Support in despair – a charity Brodie offers his expertise to when needed.
Brodie told her about the right to commute her husband’s pension. But after she approached her husband’s pension company, its response (through outsourced administrators that make sloths seem like greyhounds) was to send her a 14-page form for her husband to complete and sign, including a request for him to do a lifetime allowance calculation.
Not surprisingly, Brodie was outraged. Thankfully, within two days, through a co-ordinated email and social media blitz, he managed to get the pension commuted and the payment made to the wife – a day before her husband died.
Although the right outcome in this instance, Brodie believes pension companies and administrators need to do much more to improve the service they provide when dealing with people looking to commute a pension on terminal illness grounds.
For example, trained personnel should be on hand to help people through the process and documentation needs to be more user friendly. Pension providers should also make people more aware that such a pension commutation exists in the event of terminal illness.
Brodie is spot on. Pension providers need to raise the bar and for once show their sensitive side.
Rest in peace Lee.
Jeff Prestridge is personal finance and wealth editor of the Mail on Sunday
