Gavin H’s struggle with Aviva to get his tax relief paid into his Aviva DC pot was taken up by Steve Webb in Money Mail in March. It was not until April that it became clear that the victim is Gavin , when he revealed he was the victim of a failing of the insurer to identify him not as using salary sacrifice but simply claiming tax relief for contributions he made.
Gavin is someone who has worked his life close to those providing “pensions” and is now in the retirement zone. This is his last entry on his Linked in CV
If you want to read about the struggle he had and Steve Webb looked into , read the details here.
Gavin’s struggle to get his money paid back to him was no easy business. He has subsequently explained..
With the help of Steve Webb and the Daily Mail , Gavin stirred Aviva into action. PJ Zoulias, a former employee of Aviva gave Gavin some comfort that Aviva weren’t that bad
but it turns out that they had been – on every count!
Doug Brown is senior
But Amanda is his boss
How fortunate that the former head of Wealth Policy at Aviva has now moved on to Chair TPR. Perhaps she can help her former boss out and ensure that Gavin H gets his money back (and any like him losing out at Aviva).
It’s a shame he couldn’t get any help from The Pensions Regulator but let’s hope that Emma will be able to give her new organisation some help with problems like this. Amanda and Emma are powerful women!
Standing up to a major insurer is no easy business. Well done to Gavin H, well done to Steve Webb and well done to Amanda Blanc for finally taking this out of the hands of those who for seven years had screwed things up for clients.
Seven years is a long time to have been short-changed! I hope that retirement for Gavin H is rather longer!
I hope it’s as good as Aviva say it can be!
I note, Henry, you’re still giving oxygen to Gavin Hewitt, once of Gavin H Media then Fiducial
Communications, in his long-running pensions grievance with Aviva, who also seem to be one of Fiducial’s clients.
Mr Hewitt’s approach involving contact with the Aviva group CEO, and thinking he might involve pensions lawyers or asking TPR for legal advice, while declining to use the free services of the FOS, yet posting one-star Trustpilot reviews of the FOS, isn’t in my view the best way to have gone about this.
Others may disagree with me.
If an employer claims to be operating a salary sacrifice scheme for National Insurance purposes but does not actually meet the required legal or tax conditions, they face significant penalties, financial liability, and legal consequences.
If Gavin Hewitt is correct, that doesn’t seem to be the case here.
If his employer was, however, then in addition their employees could potentially claim that their original, higher salary remains in force because a valid, legally binding salary sacrifice variation to their contracts never took place.
If HMRC delays paying tax relief to a pension scheme under the Relief at Source method, the scheme administrator may be able to claim compensation, or the member may receive interest.
Generally, if HMRC is at fault for significant delays, compensation for lost interest or investment returns may be applicable. But I’m not sure HMRC is at fault here.
1. Identify Who Is at Fault
Employer? If the employer deducted the money but didn’t pay it to the provider within the legal timeframe (usually by the 22nd of the month after deduction), they are liable.
Provider? If the employer paid on time, but the provider (Aviva in this case) failed to claim the tax relief promptly, the provider is responsible.
2. How to Claim Compensation
Complain Officially: Submit a formal written complaint to the employer or pension provider.
Request “Put in Position” Compensation: Demand to be placed in the position you would have been in if the contributions had been made on time. This includes:
Investment Loss: Compensation for any growth the funds would have generated.
Missed Tax Relief: The 20% tax relief that should have been added.
Distress and Inconvenience: You can also ask for compensation for the time and effort spent resolving the issue.
3. Escalation Steps
If you don’t receive a satisfactory response within eight weeks, you can then take your complaint to:
1. The Pensions Ombudsman or The Financial Ombudsman Service: free services that can investigate and order compensation, which is binding on employers/providers.
2. The Pensions Regulator: Report the employer if they are continuously failing to pay contributions (90+ days late).
4. Additional Considerations with Relief At Source
Loss Calculation: Because investments are involved, you need to calculate the difference between what the pot is worth now and what it would have been worth if the money was invested on time.
Higher Rate Taxpayers: If Mr Hewitt is a higher-rate taxpayer, he’s the one who must ensure he gets tax relief from HMRC, even if the basic 20% was paid late.
Compensation Payments: If the provider pays compensation directly to Mr Hewitt (‘rather than into the pot), it may be considered a “net personal contribution,” which is grossed up again for tax relief purposes.
Incidentally, if Mr Hewitt was a higher rate taxpayer he could have benefited more from being in a salary sacrifice arrangement all along, rather than in a relief at source arrangement.
eg getpenfold.com/employer-tools/salary-sacrifice-vs-relief-at-source
Derek, please see my reply, below. Forgot to hit ‘reply’! 🙂
Hi Derek – Gavin, here – thank you sincerely for your comment, and for your analysis, which is very valuable. It is precisely this sort of expertise I lack, and why I have tried to seek specialist advice. To clarify, and underline, the employer in this situation maintains it is not at fault. And Aviva says it has “done nothing wrong” either. The employer says it was Aviva’s job to add the tax relief. I have not declined to use the services of the FOS – despite being daunted by the thousands (and thousands) of 1-star reviews on the FOS Trustpilot page. Have you read them? Ninety percent of the reviews are one-star – I simply linked to the FOS Trustpilot page, and referenced the most recent – all 1-star. The FOS says its score of “Bad” is because it’s the disgruntled who are more prone to leaving reviews. I beg to differ. I note one 5-star review has just appeared! So, there’s one happy customer! 🙂 Part of my complaint has reached FOS investigator stage, but the FOS says it cannot check/verify Aviva’s calculations – and the outcome as it stands also rests on a demonstrably gross error of fact. It is clear that the FOS does not (any longer?) have the trust of complainants, if online reviews are anything to go by. I happen to think they are, and this has been my regrettable experience (thus far). The Pensions Ombudsman has an 11-month wait just for the complaint to be allocated. My complaint is in that queue. I wrote to HMRC in November last year about this matter and I still haven’t had a reply. My MP hasn’t had a reply either – from HM Treasury – chasing up a reply. When I ‘tracked’ my latest letter – sent a few weeks ago ‘first class signed for’ (next-day delivery) – HMRC had told Royal Mail to “retain at depot”. When I sought specialist legal advice – via a claim on my HSBC-Aviva-underwritten home insurance policy (legal expenses) Aviva gave the claims handler Arc Legal the wrong inception date of my policy “in error” and my claim was subsequently rejected outright. Arc Legal says this was because the “Exceed” computer system went down. Aviva has blamed a call handler. Salary sacrifice was just one aspect of my astonishing discovery. Aviva had no idea money was missing for multiple other reasons – because of a failure in checks and balances. I have spent more than a year now trying to resolve this with Aviva. Although Aviva advised me to email the office of the CEO last May/June, my email clearly didn’t reach Dame Amanda. Recently, I broke through and, as a result, I hope there can be a resolution. Believe me Derek, this has been a journey-and-a-half and I am keen to share what I have learned with the uninitiated. Did you know FCA KeyFacts contribution structures in pension policy documents are not legally binding? Thank you once again, Gavin.
Thank you for the detailed update.
I did use the FOS a few times in the past as a trustee of some executive pension plans from the 1990s.
I would have given them 3-4 stars. They helped in the end, but took their time about it. At least those were my experiences.
I generally preferred getting a third party involved when unable to resolve a disagreement by two-way discussion or correspondence. A third perspective can help.
I also agree with the sentiment running through Henry’s coverage of your saga (scandal?) that individual members shouldn’t have to go through such angst to get redress.
Best of luck from here, Gavin.
Thank you so much Derek. Really appreciated.