A divorcee who refused to surrender more than £97,000 to pensions firm Scottish Widows has been told she can keep the money.
In 2010, Natalie McNicholas was awarded 50 per cent of her husband’s pension after their divorce. Scottish Widows valued the total pension at £622,946, meaning Mrs McNicholas was entitled to a total of £311,473.
However, the following year she received a letter from the firm, saying they had overvalued her husband’s pension in their submission to the court, the Mail reports. The true value was only £400,000 they claimed, and she therefore had to repay the £97,626.39 overpayment.
McNicholas, now living Bournemouth and looking after her disabled son, refused to agree to the repayment.
“I wasn’t going to sign away that amount of money simply because they said so. At no stage did they explain what the reason for the miscalculation was. If I did have to pay the money then I would but I wasn’t going to do it simply because they told me to.”
Scottish Widows threatened her with legal action, insisting that she must repay the money within 14 days – also raising the prospect of interest and legal fees.
“As the carer of a child with disabilities, the long-term future is a scary thing anyway. My only priority is to protect my children and particularly provide for my son. Getting a letter saying that a third of my retirement fund would be taken away was very alarming. It was my whole future.”
The mother of three sought legal advice and was told to take her case to the Pensions Ombudsman, a free service set up to rule on disputes between individuals and pensions firms.
The Ombudsman has now ruled in her favour, saying she can keep the extra money because the overpayment had been caused by “maladministration’ on the part of Scottish Widows. The entire divorce settlement she had reached with her former husband had been moulded by the firms’ alleged overvaluation of the pension.
The Ombudsman explained:
“In reliance on a mistake as to the true value of the pension she has entered into commitments that she could not otherwise afford, and is unable not to go back and renegotiate the financial settlement or seek to vary [alter] the court order.”
The Ombudsman’s man report ordered the company to pay her £250 compensation :
“…this whole process has caused Mrs McNicholas a great deal of distress and uncertainty. She has been faced with the prospect of having to repay this money and suffered the anxiety of wondering whether the arrangements she has made for the future may have to be revisited. I consider a payment should be made to reflect this.”
Scottish Widows apologised for any “distress and inconvenience caused” in “this isolated case”.
Photo of Bournemouth by John Clive Nicholson via Wikipedia under a Creative Commons licence