The Abbey Life Vanishing Annuity Mystery

A correspondent writes: "Back in the 1970s, I acquired an annuity from Hill Samuel Life Assurance Limited. I filed the paperwork away and thought no more of it until 2002, when I received the news that the company's business had been transferred to Abbey Life Assurance Company Limited. "But don't worry, the letter assured me. This transfer will have no effect on the payment out of your policy benefits other than that Abbey Life Assurance Company Limited is now the responsible paying authority. "When the time approached for the annuity to start paying out, I got a letter from Abbey Life offering me the option of taking the annual pay-outs originally on offer or a cash lump sum as an alternative. "Imagine my surprise when I found that the amount of the annual pay-outs was 25% less than the amount given in the original Hill Samuel policy from the 1970s. Which confirmed my suspicion that the bigger the company, the bigger the mess they'll make of your affairs. "When I phoned Abbey, the person I spoke to was unable to explain the discrepancy. So now I'm waiting to hear from Abbey as to whether I have been the victim of a cock-up or a rip-off." Later "When the letter arrived, it was identical to the first one apart from containing a line shoved in to offer 'sincere apologies' and the correct payment information. Apparently, there's no danger of an explanation of how and why they tried to rip me off for 25% of the pension."

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