*Update* This article refers to the original version of an article in Money Marketing. This was updated on 17th/18th April and no longer contains the financial loss mentioned in this article. Thanks to Katey Pigden who came off maternity to promptly deal with this

There will be many readers , including a lot of people who know very little about pensions, who will read this headline in Money Marketing and assume that something has gone seriously wrong,

A pensioner has expressed frustration with scheme administrator Mercer after he lost £600,000 off the value of his pension pot.

This is what appears to have happened. Mr Inglis has worked for 39 years for Scottish Power and is now 55. He applied for a transfer value for his pension rights in 2021 and was given a CETV of £1.4m in exchange for giving up his pension rights. He made the same request in 2022 and was told that the transfer value was £800,000. He has the same right to a pension, for him and his family – the same rights to tax-free-cash.

Mr Inglis is complaining that it is down to Mercer that he can now transfer £600,000 less. The only way that this could be argued would be if Mercer had blocked him from taking his transfer but this isn’t what happened, Mercer – we are told – took over the administration recently. Mr Inglis’ argument is that since taking over, Mercer made it hard for him to get online transfer values.

So Mr Inglis has lost no money, he has simply lost the right to a higher transfer value and his complaint against Mercer sounds like frustration with himself.

This is not however how the story is reported in Money Marketing

He (Mr Inglis)  said within a year of Mercer taking over the running of the scheme, the value of his pension pot has dropped to £800,000.

This is the story; the implication is that Mercer’s arrival has led to the fall in CETV. Mr Inglis more than implies – he states that Mercer lost him money.

I got a reply in November 2022 after dozens of emails had been ignored only to find to my horror that they had lost £600,000 off the value of my pension pot,” he told Money Marketing.

Worst of all, Money Marketing are prepared to endorse this nonsense with the headline

Client slams Mercer after losing £600k value on pension pot

The remainder of the article is a mixture of advisor anecdotes, trust pilot scores and comments left by savers suggesting that Mr Inglis’ complaint is part of a bigger picture  of Mercer’s poor customer service.

This reporting is simply scandalous

The public’s perception of defined benefit pensions like Scottish Powers is increasingly that they provide a pension pot rather than an income for life.

This perception is wrong. The transfer value is incidental to the pension and unlike the pension can go down as well as up.

Money Marketing do not even mention that Mr Inglis’ pension is intact and will have actually increased year on year as a result of statutory revaluation.

It leaves the explanation for the fall in value to Mercer and make no effort to explain that the fall in the CETV was nothing to do with Mercer.

Nor does the article mention that Mr Inglis could only have taken his CETV with the support  of a qualitied advisor.

Mr Inglis has lost nothing. He has never had a pension pot from Scottish Power and were he to speak with his trustees rather than Money Marketing, he would be told that he is in a well run defined benefit pension scheme that will give him a wage for the rest of his life.

What is most distressing about this story is that Mr Inglis appears to have lost his health as a result of worrying about something he need not have worried about.

The 55-year-old said his experience dealing with Mercer helped cause stress-induced ill health resulting in his early retirement in January 2023.

and Mr Inglis attributes this to Mercer

“I find Mercer’s unprofessionalism and lack of care and communication totally insulting. I’m at rock bottom over this. My dreams are all destroyed. How can Mercer get away with this?”.

This may make for a good story but it is also fodder for ambulance chasers. There are thousands of people like Mr Inglis who have lost nothing but the right to a bumper CETV all of whom may be encouraged to go after administrators, trustees and advisors for the opportunity cost afforded by the inflated CETVs of yesteryear.

Let us remember, even when at their peak – during the time of peak QE with gilt yields trending to zero, taking CETVs  was not generally considered a good idea.

Money Marketing may have given this story to a junior reporter but there is no excuse for the editor to have allowed it to be published. It’s good that the editorial team has reviewed and altered the article (thanks Katey).

Journalists have a part to play in preventing poor decision making and Mr Inglis has made some poor decisions about his pension situation. This has led in part to his losing his health and retiring at 55.

*Update* Money Marketing have been in contact, the editorial team will discuss the article on Monday (the next working day) in the light of this article.

Whether Mr Inglis has a genuine claim for poor communication is hard to tell. He has means to make that complaint but there appears little evidence for the contention that Mercer has lost him any pension.

One final thing – Mr Inglis- at 55 – is not yet a pensioner, he will be when he starts receiving his pension. He is in the fortunate situation of having a very valuable defined benefit pension that could pay him a decent wage for 40 years, a pension that could continue to dependents, a pension with inflation protection.

He should congratulate himself for working a lifetime with one company, and being in a  magnificent pension scheme most of that time. How many people 55 or older, would wish themselves with his options?