‘I'm retiring at 55 but my pension has suddenly shrunk by £3,000 a year’

For around a decade I have been looking forward to my early retirement, but now that the time has come at the age of 55, I've been hit by a nasty shock with regards to my pension.

I filled in the documentation with the pension company, Rothesay, and expected to receive my £102,000 lump sum in early February. Yet early February came and I heard nothing.

When I called to chase, I was told a letter was being sent out to me regarding an error it had unfortunately made, which had changed the annual sum I will be receiving. I found this really unsettling and I argued that the figures I had received on my December statement should have been guaranteed.

Tough, I was told, this was an error which had to be corrected, meaning my pension would be reduced. When I asked the woman to explain how this was possible, she put the phone down on me.

On February 17 I received the letter, which showed the three different elements of my pension: The £102,000 cash lump sum, a £15,000 "reduced annual pension" and a £3,000 "single life temporary pension".

I phoned up to ask how the single life temporary pension would be paid and was verbally advised this would actually be included in the overall annual pension figure, leaving me £3,000 a year worse off. I cannot believe that they can now say this sum is inclusive of the £15,000. All the paperwork I have clearly stated it was separate.

I have formally complained to Rothesay but am still waiting for them to revert back.

– SH, via email 

Dear reader,

Decades of your hard work had seemed to have paid off with you being in the fortunate position to retire early. You had been really looking forward to hanging up your suit and taking the time to pursue other interests, while you're still young enough to enjoy them to the maximum.

However, it seems that the poor service you received here by Rothesay sent you into a tailspin of confusion. Ultimately, it has led to some level of distrust in the company. You simply don't know what to believe anymore, hence why you contacted me.

For anyone about to retire, hearing that the annual income on which you thought you could rely is going to be significantly less than expected, is bound to be highly anxiety inducing.

When you learned about this mysterious error you feared the worst, and you then faced an agonising wait to find out just how severely this was going to affect your standard of living over the next chapter of your life.

As it turned out, you had nothing to worry about as your pension was reduced by a grand total of 12 pence, which will make no material difference to your life whatsoever. However, when you were then told your so-called single-life pension, which had always been referred to on documentation as separate to your main pension, was in fact part of the £15,000 annual total, you were sent back into panic mode.

Far from 12 pence, £3,000 a year would mean the difference between being able to afford holidays or not, the ability to eat out, or treat your family on special occasions.

Thankfully I was able to set your mind at rest as it turned out the rather rude-sounding adviser you had spoken to on the phone had made a "human error". Rothesay confirmed your £3,000 single life pension will be paid in addition to the £15,000 pension, as per your documentation. Now that this issue is resolved there is nothing for me left to say, other than I wish you a very happy early retirement.

A Rothesay spokesman said: “We are committed to customer service excellence and we are disappointed that we fell short on this occasion. We are pleased we were able to resolve the issue quickly by confirming the customer will receive their full pension as set out correctly in his main pension statement and supporting policy documents”.