Pru customers to share £4m refund after error

Published on Wednesday 13 April 2011 00:03

Insurance giant Prudential is paying out £4 million in redress to thousands of policyholders who lost money following an administrative blunder.

Some 39,000 investors will receive payouts ranging from 100 to 2,000 because their pension plans were valued incorrectly.

Those affected held Scottish Amicable unit-linked pension funds and retired, switched or partially surrendered their policies between June 2004 and December 2008.

The Pru said a routine audit had uncovered "some inconsistency" in the way in which tax taken from funds had been repaid to investors in the form of credits over that period.

The 39,000 investors whose policies were valued wrongly are being put back in the position in which they would have been had the tax credits been paid correctly.

The Pru stressed that the payments did not constitute "compensation" and said the Financial Services Authority had been made aware of the issue at the outset. Most customers affected by the issue will get less than 100, but some 9,000 will receive up to 500 and a further 100 are in line for payments of 2,000 or more.

Separately, a court judgment is expected today on a case brought by members of Prudential's pension scheme over changes to voluntary top-ups .

Independent trustee John Ralfe claimed that the case could result in a bill of millions of pounds in backdated payments for the insurer.