My wife, Margaret, is terminally ill with brain cancer. She is loved and well cared for at home. To pay for her care last month she decided to withdraw £20,000 from the pension she holds with Aviva. This is a workplace pension and she took the 25 per cent tax-free element last year, so this withdrawal would be subject to income tax.
But when she logged into her online account she saw that the value of her pension had fallen from £118,000 to £83,000 in the space of a month. We called Aviva, which said that a pension value can change because it is invested in the stock markets. I said this was ridiculous because the fall represented 30 per cent of her pension and no markets had fallen by this amount during that time. It then admitted that it had made a mistake and the value is now back up to £118,827, although it has not explained what went wrong.
At this stage, my wife was far too upset to continue. She had registered me as her attorney, which meant that I was legally allowed to arrange the withdrawal on her behalf. While I have a government access code so that companies can view my legal document online, Aviva wouldn’t accept it because the code was out of date. I managed to get a new code, which I gave to Aviva.
It then told me that it would take 40 days to establish me as Margaret’s attorney and arrange the withdrawal. I am concerned that she may die before then.
William, Buckinghamshire
Katherine Denham writes
I couldn’t begin to imagine how hard it must be to see your wife’s health deteriorate so quickly — Aviva needed to act urgently.
You were considering using money from your own pension to pay for her care, but because you are a higher-rate taxpayer, you faced paying tax at 40 per cent on withdrawals. This would cost you £4,000 more than withdrawing the same amount from your wife’s pot.
When your wife initially went to withdraw this money, you said she had been just about physically and mentally capable of making this request, but had been deeply distressed when she discovered that her pension had plunged £35,000. Fighting with a company can require a huge amount of energy, so I can see why she then asked you to step in.
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I was determined to get to the bottom of this mistake. Aviva told me that the incorrect pension valuation was caused by a “temporary technical error”, which meant that it briefly showed an incorrect figure. It said this was an isolated incident and that no other customers had been affected.
If it had not been for that error, your wife would have withdrawn the money quickly and simply from her pension without needing to involve you.
Thankfully you had a lasting power of attorney document, which Margaret had registered years ago to let you make financial decisions on her behalf when she no longer could. But the access code, which is provided by the government so that companies can view a power of attorney document remotely, expires after a year. It was easy enough to get a new code via gov.uk/use-lpa, but there was another issue: some LPAs come into effect immediately once they are registered, but your wife’s only lets you act on her behalf when she no longer has capacity.
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Aviva wanted to speak to your wife over the phone to get her permission to carry out the request. It said she could also provide a letter, but by this point her health had declined to such an extent that this wasn’t possible.
Aviva would then usually get a letter from a medical professional to confirm a customer’s loss of capacity. I was concerned that this might take too long, so I was pleased when it agreed to make the £20,000 payment to your wife’s account, without you having to provide any extra documentation.
Aviva said: “We are very sorry to hear about Margaret’s illness, and our thoughts are with her and her husband during this incredibly difficult time. We regret the additional worry caused by the delay in accessing her pension.”
To acknowledge the distress and inconvenience it paid you £750 compensation. Shortly after that you gave me the very sad news that Margaret had died. I am so sorry for your loss, and the fact that you had been dealing with this saga in the last weeks of her life was heartbreaking.
You said: “In memory of my lovely wife of 52 years, I will donate the compensation to University College London Hospitals Charity to help fund research into a cure for glioblastoma.”
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