Scottish Widows accused of giving 'allegedly negligent advice'

According to the independent actuarial consultancy, affected schemes have lost value estimated by to be over £300m. But the actual figure could be much higher, it said.

The schemes were said to have been advised by internal Scottish Widows actuaries to switch out of with-profits guaranteed deferred annuity funds into the Scottish Widows Managed Fund.

ARC director Roger MacNicol said: "Was the advice in the interests of the pension schemes or was it in the interests of the Scottish Widows? Was there a fundamental conflict of interest? One man’s liability is another man’s asset – a reduced liability for Scottish Widows is reflected by a reduced asset base for these schemes."

He added: "Scottish Widows has a case to answer. Our concern is not to criticise Scottish Widows but to ensure our clients gain the redress they deserve. The last thing the financial services industry needs is another mis-selling scandal and we hope that Scottish Widows agree and work with us to grant compensation or restitution in early course."

The switches allegedly took place in 1999/2000 at the time of the take-over of Scottish Widows by Lloyds TSB.

ARC has alerted a range of industry bodies including The Pensions Regulator, the Actuarial Profession and the Financial Services Authority.