Standard Life is to reimburse 97,000 pension customers who lost money invested in the company's Pension Sterling Fund in January. Standard Life pension
customers who lost 4.8 per cent of their investment in the company's 'Sterling Fund' – which was supposed to be invested largely in cash – are to be repaid.
In a statement released today, the pension
provider said that it is restoring the value of the fund, which will put each customer back in the position they were in before the fall in value, which was revealed on January 14.
The U-turn follows outrage from customers and advisers alike over the literature accompanying the Sterling Fund, which caused confusion over where the money was invested.
Customers were led to believe that the Sterling Fund pension was invested mostly in cash, but it has since been revealed that much of the money was actually invested in mortgage backed assets.
At the time, John Gill, managing director of the customer service division of Standard Life said: "As is typical with this type of fund, the Pension Sterling Fund does not come with a guarantee that the unit price will not fall, as the value of the assets will go up and down in line with market movements."
However, Standard Life has now decided to compensate its customers, Mr Gill said: "Standard Life would like to take this opportunity to apologise to any customers who have been affected by the fall in value of this fund.
"In hindsight, some of the literature supporting the fund fell short of our own high standards, and it is important that we put this right," he added.
Despite the scandal, Standard Life continues to believe the Pension Sterling Fund is a good investment choice. Get pension advice »
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