Widows vows to pay up after pensions glitch

Scottish Widows could be forced to refund thousands of pension investors after it failed to automatically adjust their portfolios.

Customers in the Edinburgh-based firm’s group personal pensions who chose the bespoke lifestyling option have their investment mix rebalanced quarterly to ensure it continues to match their needs.

But a technical glitch means the adjustments have not been made. It was not clear when the problem began, but the provider, owned by taxpayer-backed Lloyds Banking Group, said it was working to fix the problem.

It is estimated that up 10,000 customers may be affected. The firm said anyone who suffered a loss would be put back in the position in which they would have been without the error.

A spokesman said: “Scottish Widows has identified a system error affecting some customers who have bespoke lifestyling rebalancing as part of their pension. We are working, as a matter of urgency, to identify the customers affected and put in place the appropriate remediation. Customers affected will not suffer any loss as a result of this error.”

Bespoke lifestyling allows investors and their advisers to pick their own funds and asset allocation, with the provider rebalancing the selection to ensure the mix is maintained But the error means some investors may have had more money invested in markets during the recent volatility than they would have expected.