I am 64 years old and I retired early six years ago due to health problems. At first I didn’t know what was making me so sick, but after several years of trying, in 2021 I received a diagnosis of motor neurone disease.
This has had a huge impact on my life and unfortunately at this time there is no cure.
I have come to terms with my situation, but it is important for me to get my finances in order before my condition deteriorates and I am unable to communicate effectively. I don’t want this to become my wife and son’s responsibility.
During a conversation with a financial advisor last year I was asked if I had any deferred pensions from a previous job.
I had completely forgotten about a small defined benefit pension I had at the North East Electricity Board, where I started as a trainee in 1976 and left in 1985.
Despair: TM tried to claim an old sickness pension, but the administrator made him wait
In November 2023, I contacted the administrator, Railpen. I was told I could apply to receive my pension early due to a disability and I filled out an application form.
Railpen confirmed receipt and said he would pass my case on to medical advisors.
But since then I have received very little correspondence. When I call, they tell me the request is “in progress.” I wrote a letter of complaint after six months but haven’t heard anything.
It has been over nine months since I applied and I would suggest that the time Railpen has taken is completely unacceptable. TM, Aberdeenshire
Helen Crane, This is Money’s consumer advocate, responds: I appreciate you taking the time to alert me to this, during what must be an extremely difficult time for you and your family.
Motor neurone disease affects the brain and nervous system, causing progressively worsening weakness. It can significantly shorten life expectancy and is unfortunately fatal.
From what I’ve heard, he’s coping admirably with his diagnosis.
His focus right now is to get his finances in order so he can live as comfortably as possible and support his wife and child.
This can’t be an easy thing to do and unfortunately, it has become even more difficult thanks to Railpen.
Railpen is one of the largest pension funds in the UK.
It is responsible for the retirement funds of 350,000 railway workers and also manages the pension plans of 150,000 people like you who have worked in the energy and infrastructure industries.
He is already claiming an early pension from more recent employment, from which he also received a 25 per cent lump sum.
But after his conversation with a financial advisor, he recalled a generous defined benefit pension from his nine years working with the Northeast Electricity Board in the 1970s and 1980s.
The electricity distribution company was later privatized and is now part of a company called Northern PowerGrid.
Since it was part of the public sector at your time, the pension is based on your final salary while you worked there. Although pay packages have increased greatly since you left in 1985, you estimated they could still be worth several thousand pounds as a lump sum, as well as providing you with a modest annual pension.
He later discovered that he also had a small spousal pension attached to him, which would pass to his wife after his death, making claiming the pension even more important. It seemed like all his hard work as an electrical apprentice all those years ago had paid off.
The last pension statement I had was from 2011 and at that time the annual pension at age 65 was £1,272, with a tax-free cash sum of £3,814 and a spouse’s annual pension of £848, but the fund would have grown substantially since then. then as DB pensions increase each year due to inflation.
Support: Our reader was interested in accessing money to ensure his family was supported.
It’s never good for companies to fail to communicate with customers who are trying to get their finances in order, or to leave them anxiously waiting for their money due to an extremely slow administrative process.
But when the person in question tries to collect an early pension due to a life-limiting illness, this ceases to be simply an inconvenience and, in my opinion, becomes cruel. You have also described it in these terms.
You told Railpen that your time was limited, as you may not be able to manage your own finances for much longer. But he still made you wait.
He first contacted me in August, by which time I had waited nine months. The time it takes to apply for an early pension can vary, and medical assessment to prove your claim of ill health would add time, but the fact that this did not happen in that time is unfortunate.
In a letter from November 2023 they told him that he had provided all the necessary documents and evidence. But over the next few months, he was repeatedly asked for some of these again.
The medical interview, with a third-party occupational health contractor, was scheduled for May 2024, but was canceled without explanation with three days’ notice.
He also noted that the location he would have had to attend for this was a two-and-a-half-hour drive from his home and had no parking for disabled visitors.
When he contacted Railpen in June this year, desperate for answers, he was told the pension manager was “awaiting approval of the additional costs associated with your referral”, which is why the appointment was cancelled.
In my opinion, this is not acceptable. As such a large pension fund, it should have better results.
In a response email he showed me, he said: ‘The way my application has been handled falls far short of what I would have expected from a large utility pension scheme. Six months and no progress is surprising considering my condition.’
I contacted Railpen in September and Northern PowerGrid pension trustees contacted me to say they and Railpen would fast-track his case.
They contacted you, but you were still plagued by annoying administrators. He was required to send his original birth certificate to Railpen, which he has already done, in November 2023.
Repeated request: TM had sent his birth certificate to Railpen last year, but was asked to send it again. This was just one of multiple delays in his pension claim.
The medical interview with an external occupational health company was scheduled for October and this time was conducted by telephone. They promised a copy of the medical report within three days, and I also had to arrange it with Railpen because it didn’t materialise.
Finally, this month he received a statement confirming that he would be entitled to the early pension.
It gave him two options: a modest lump sum with a small annual pension, or a larger lump sum with a small annual pension.
You opted for the latter and will receive a lump sum of £10,643 and an annual pension of £1,596.
His wife is also entitled to an annual spousal pension of £1,238 after his death.
A spokesman for pension trustees Northern PowerGrid said: “Unfortunately, TM’s application has not been handled as efficiently as is usually the case due to some administrative issues which should have been identified and corrected more quickly than they were.”
‘We have contacted TM to apologize for the delay in processing your application and now that we have received the medical report, payment will be made shortly. “We are working with Railpen to implement a process to ensure delays are not experienced again.”
It took a year from first contacting the pension manager (and my intervention) to get to this point. The money has not yet been paid, but he has been assured that he will receive it soon.
My concern, however, is that other seriously ill pension savers in funds managed by Railpen are experiencing the same thing. That is not acceptable.
Your experience is frankly shocking, but I hope the money makes your life a little easier and I’m glad you can now put this behind you.
Wish you all the best.
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