Blundering bank pays ?3,800 for U-turn on pensioner's cash

For more than 20 years, I have paid into two separate Barclays pension policies, now worth £130,000. In the past few years, my health has been indifferent, and I decided to retire. I had no problems transferring my various other pensions to buy a Friends Provident annuity, but Barclays insists I pay an early with drawal premium of £2,000 for each one.

Friends Provident queried this with Barclays and was told that, in the circumstances, the exit charges would not apply. Seven days later, Friends Provident told me Barclays had changed tack and insisted that I do pay. I am deeply unhappy about this.

KG, Carluke

Barclays deducts the cost of the policy through 'initial' units. Your first few years' contributions buy only this type of unit which, throughout the life of the policy, attract higher charges until, on retirement day, you have paid the lot. Because you wanted to activate the pension before the age on the policy, Barclays imposed a fee to recoup the charges it reckoned you still owed.

But someone at Barclays' call centre mistakenly misled the Friends Provident adviser by giving him the current value, not the (lower) transfer value, of your pension. Barclays knows this because it has found a recording of the conversation. It has now agreed to pay you the difference between the two pension values. As you have already taken the pension, you will receive £3,824 with which to buy another annuity or go on a spending spree.

Credit note limit: Knickerbox block


My husband bought me underwear from Knickerbox last year but the bra was the wrong size. I returned the set and was given a credit note. I queried the three-month time limit printed on the note but was told not to worry as the note would be renewed if it ran out before I used it.

When I attempted to renew it, however, the note was kept and Knickerbox refused to give me another. In effect, they have had £16 of ours for nothing.

After one terse letter which restates that the credit note is valid for only three months, all attempts to contact them have been ignored. What can I do?

DL, London

Shoppers have no legal right to return goods just because they do not fit or they dislike the colour but, for the sake of good customer relations, many shops will exchange goods.

Knickerbox, now owned by Ann Summers, says it will exchange unworn underwear for any reason within 14 days of purchase, and thereafter gives a credit note. It will extend the note for a further three months if there has been a good reason why you could not use it sooner.

As you were misled into believing you could extend the credit note, you have cause to complain and the store should have passed you on to the customer services department. I have explained this, and it is now expecting your call.

Equitable Life: Should I leave?


I am 75 in October and must therefore take up my Equitable Life personal pension which I started in 1990. Should I exercise the open market option with another company, as Equitable seems to be in confusion? Or should I take an annuity with Equitable in case, by staying as a member, I might share in any distribution resulting from a sale of the company?

CP, Lustleigh

Equitable Life with-profits policyholders earned no annual bonus for the first seven months of this year but this loss will be made up when the company is sold. If by then you have another company's annuity, you will still get the shortfall when it is paid. There might also be a windfall payment from the sale but only if you are still a member. To qualify, you would have to buy a with-profits annuity from Equitable. If you have an Equitable guaranteed option, this would pay more than other annuities but without a widow's benefit, so you might not think it worthwhile. To help you decide if staying is best, get quotes from several annuity providers, or talk to a specialist annuity adviser.

Equitable's memorandum of sale goes out tomorrow, and potential purchasers should be known by the end of the year.

Selling life cover: The wrong policy


I have a whole-life plan with Axa Equity & Law which began in 1993. I wish to surrender the policy and have contacted the company for a quote. I tried to sell it through the second-hand market but was told that, as my policy is not an endowment, they were not interested. Is there anyone who will deal in this sort of policy?

JD, Londonderry

You can often get a better price for life insurance policies if, as you tried, you sell on to another investor. This is mainly for endowment policies but you can sell whole-life policies if they are with-profits policies and the insurer allows them to be converted to endowment. There is no market for unit-linked whole-life policies which, unfortunately, yours is.

Writeback: Who's stupid?

SK of Southport fears he may be 'seriously stupid' after his recent dealings with the financial services sector.

'I like to think of myself as passably intelligent, but Friends Provident tells me that my endowment is underperforming and then sends me a glossy annual report trumpeting its achievements. Scottish Life guarantees that, if I pay an additional £8 a month, I will get back less than I put in, in 11 years' time. In addition, they will deduct £31 to pay an adviser, whether or not I consult one.

'When I was about seven, I learned that, if someone is top of the class, someone else must be at the bottom but I discover that all Isas, without exception, are top, and most have been selected for some award or commendation.

'Also, the organisations which run them are the nonpareils of the sector.'

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