Questions of Cash: June 2015

Posted on August 4, 2015 · Posted in The Independent

Q  I took partial retirement from the civil service in March 2012 and received a lump sum. I then completely withdrew from the pension scheme. I was told my WPS [Widow’s/Widower’s Pension Scheme] refund would be paid on full retirement. The WPS refund is paid to unmarried employees who pay the full married person’s contributions to the Civil Service Pension Scheme.  I worked part time until full retirement in March last year. At that point I chased my WPS refund and was told it was being dealt with.  In July last year, I received a letter from the new operators of the civil service pension scheme, MyCSP, offering the payment as what was called an ‘unauthorised payment’.  I refused to accept it to be paid in this way as it then becomes subject to special 55 per cent tax rules. I believe that if the payment had been paid to me at the correct time it would have been part of my tax free lump sum.  I believe that paying the refund as an ‘unauthorised payment’ discriminates against unmarried employees.  I am frustrated by my attempts at correspondence with MyCSP.  JB, London.

A  Other former civil servants are also unhappy about delays in correspondence with MyCSP regarding their pension arrangements.  (See Questions of Cash, 28 March, 2015.)   Unfortunately MyCSP declines to comment on problems with individual pensioners beyond its spokeswoman saying: “As administrator for the Principal Civil Service Pension Scheme, MyCSP is required to follow the Scheme and HMRC rules regarding all refunds and payments and we believe that we have done so in this case.”  As a result of our enquiry to MyCSP you have received additional correspondence explaining the situation.  You are not happy with this, but accept that MyCSP is legally correct.  You explain: “The Pension Advisory Service have now checked all the rules and it seems that MyCSP is in the right.  The payment will be classed as an ‘unauthorised payment’ under HMRC rules. I will be liable to pay tax as they decide between 40 and 55 per cent.”  Under the ‘classic’ Principal Civil Service Pension Scheme – to which you belonged – an active scheme member who is unmarried at time of retirement is eligible for a refund of some or all of their Widow’s/Widower’s Pension Scheme contributions.

Q  I have used gas and electric prepayment meters since March last year, when I began renting a property.  As I pay for energy ‘up-front’ from Scottish Power I was alarmed to receive a bill for £318 in February. On the bills I noticed that many of the top-up payments I had made had not been accounted for.  I wrote to Scottish Power to complain, as well as give details of my top-up payments. Attempts to communicate with Scottish Power by letter and email proved futile. I then telephoned customer services and was told that many of my top-up payments had gone into the previous tenant’s account. I was reassured this would be corrected. It wasn’t.  I tried phoning Scottish Power again, but was told my complaint would no longer be dealt with by phone. My communication with Scottish Power seems blocked and I have received more wrong bills.  The most recent bill still reports I am in debt and contains an obvious miscalculation about my energy use.  JH, Somerset.

A   Scottish Power seems no nearer resolving its catastrophic failure in customer services – at least if our readers’ correspondence is an accurate measure.  But it seems that our readers’ problems are resolved once Questions of Cash is involved.  A spokeswoman for Scottish Power says: “We have contacted [the reader] and apologised for the shortfalls in service and for the inconvenience this matter caused.   After carrying out a full investigation into his account we found that [the reader’s] key for his prepayment meter was set incorrectly which resulted in underpayments on his electricity account. This has now been corrected.  We have assured [the reader] we would apply an adjustment to clear off any debt owed due to this error.  In way of an apology we have issued a goodwill payment of £100.  [The reader] is satisfied the matter has now been resolved.”  You tell us that as a thank you for our involvement you have donated £90 of this to The Independent’s favoured charity ‘Space for Giants’.