Aviva stopped my 96-year-old mum’s annuity over an address mix-up

A Devon couple have won a year-long battle with Aviva after it cut off a frail 96-year-old woman’s £100 a month annuity payments.

Ellen Wade’s son and daughter-in-law got embroiled in a bizarre misunderstanding over her address – despite being easily able to prove she had lived there since the mid-1970s.  

Aviva stopped Ellen’s monthly payments, which help cover private carer bills, after John and Chrissie Wade themselves moved home in 2018.

They informed Aviva their separate address, used for Ellen’s correspondence, had changed but never asked for hers to be amended.

The wrangle that ensued was complicated by John not having power of attorney over his blind and bed-ridden mum’s financial affairs – highlighting the serious problems loved ones can encounter when people fall ill without this vital failsafe.

John and Chrissie can’t afford to pursue the only option when someone is incapacitated before they sort out power of attorney, the long and expensive court process of being appointed their ‘deputy’ instead – see the box below.

As a result, Aviva itself was unable to comment to This is Money about this case because Ellen couldn’t give permission. However, the firm issued a general statement, which is below.

Aviva has now paid a lump sum of £1,276 into Ellen’s bank account to cover the lost year and restarted her payments, after the Wades complained to the Pensions Ombudsman.

The Ombudsman service was also hamstrung by John not having power of attorney to give it formal permission to investigate his mum’s case.

But a member of its early resolution team, while telling the Wades he didn’t think that ‘technically’ Aviva had done anything incorrectly, phoned the pension firm to attempt to resolve the mix-up over the address.

Following his informal intervention, Aviva accepted Ellen’s doctor’s letter confirming her longstanding home address in Harrow, Middlesex.

Chrissie said the issue was down to errors by Aviva, which misunderstood a notification of her and John’s own change of address, stopped Ellen’s annuity without notice and ignored pleas to sort out the situation.

‘Mum needs this pension payment as an essential contribution to her daily care being as she is totally blind and bed-ridden and now mentally and physically unable to sign any documents,’ she told This is Money.

Unfortunately, Ellen herself had never thought about getting round to setting up power of attorney before falling ill.

John and Chrissie have consulted a solicitor about applying for deputyship. 

However, Chrissie said they were advised this would cost thousands of pounds and take many months, and was ‘not a practical solution to a problem caused by Aviva’s mistake’.

Aviva’s responses ‘have always been discourteous’ – including in the telephone call from a member of staff informing them annuity payments would be restarted – and there was a ‘continuous inference that we were in the wrong’, said Chrissie.

‘We still feel that we and Mum in particular have been very badly treated by Aviva.’

She added that while the dispute was still ongoing, Aviva had at one point sent a £100 compensation cheque to Ellen, which she and John were unable to put in her bank account because they have no access to it.

Chrissie said when she made this point to the Aviva staff member who rang about annuity payments restarting, ‘their attitude was effectively – ‘hard luck’!’ and her request to simply pay the £100 into Ellen’s bank account was rejected.

After This is Money approached Aviva for comment, it paid the cash into Ellen’s account.

A spokesperson for Aviva made the following general comment, which it stressed was not about Wades’ case: ‘We understand how difficult and distressing it must be for the families and loved ones of vulnerable customers who want to help organise their financial affairs.

‘Strict data protection rules are in place to protect our customers. We would encourage those families who have relatives that are incapacitated in some way to either arrange power of attorney or to apply to become a deputy through the Court of Protection.’

The data rules referred to mean a customer, or a person with power of attorney or an appointed deputy for them, is required to authorise individual changes to an annuity policy. 

It is unclear how this applies in the Wades’ case, since they notified Aviva of a change to their own address, not one involving Ellen herself or her annuity. 

Former Pensions Minister Steve Webb said of the Wades’ case: ‘It’s good to see the Pensions Ombudsman being creative and trying to find a solution to this problem.’

Webb, who is shortly due to join actuary and consulting firm Lane Clarke & Peacock as a partner, is also a volunteer for the Ombudsman’s early resolution service.

He added: ‘This is another reminder of the importance of getting power of attorney in place well before life beomes difficult and complicated.’

Anthony Arter, the Pensions Ombudsman, said: ‘This case highlights how important it is for the public to be able to approach the Pensions Ombudsman at the earliest possible opportunity for assistance with their pension complaints so our early resolution team can then use its wealth of skills and experience to bring the matter to a sensible and appropriate outcome without the need for a formal determination.

‘We aim to make it easier for all parties to resolve pension complaints and always look to do so at the earliest stage possible.

‘We are delighted that we were able to intervene and help the parties to reach a sensible and pragmatic outcome, more swiftly than would otherwise have been the case.’