I asked for my pension early as I have motor neurone disease – but Railpen has made me wait a year: CRANE ON THE CASE

I’m 64 and took early retirement six years ago due to ill health. At first I didn’t know what was making me so ill, but after several years of trying I received a diagnosis of motor neurone disease in 2021.

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 to 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 the responsibility of my wife and son.

During a conversation with a financial adviser last year I was asked if I had any deferred pensions from previous employment.

I had completely forgotten about a small defined benefit pension I had with the North Eastern Electricity Board, where I started as an apprentice in 1976 and left in 1985. 

In November 2023, I contacted the administrator, Railpen. I was told I could apply to take my pension early due to disability and completed an application form.

Railpen confirmed receipt and said it would pass my case to the medical assessors. 

But since then I have received very little correspondence. When I telephone, I am just told the application is ‘in progress’. I wrote a letter of complaint after six months but have not heard anything.

It has now been over nine months since I made my application, and I would suggest that the time Railpen has taken is completely unacceptable. T.M, Aberdeenshire

Helen Crane, This is Money’s consumer champion, replies: I appreciate you taking the trouble 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 weakness which gets progressively worse. It can significantly shorten life expectancy and is, sadly, fatal. 

From what I have heard, you are dealing with your diagnosis admirably. 

Your focus at the moment is sorting out your finances so you can live as comfortably as possible, and provide for your wife and son.

That cannot be an easy thing to do, and unfortunately it has been made even more challenging thanks to Railpen.

Railpen is one of the UK’s largest pension funds. 

It is responsible for the retirement funds of 350,000 rail workers, and also administrates the pension schemes of 150,000 people like yourself who have worked in the energy and infrastructure industries. 

You are already claiming an early pension from more recent employment, from which you also took a 25 per cent lump sum.

But after your conversation with a financial adviser, you recalled a generous defined benefit pension from your nine years working with the North Eastern Electricity Board in the 1970s and 80s.

The electrical distribution firm was later privatised and is now part of a company called Northern PowerGrid. 

As it was part of the public sector in your time, the pension is based on your final salary while working there. While pay packets have grown a lot since you left in 1985, you estimated it could still be worth several thousand pounds as a lump sum, as well as getting you a modest annual pension. 

You later discovered it also had a small spouse’s pension attached, which would go to your wife after you are gone – making claiming the pension even more important. It seemed all your hard work as an electrical apprentice all those years ago had paid dividends. 

The last pension statement you 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 an annual spouse’s pension of £848 – but the pot would have grown substantially since then as DB pensions increase each year because of inflation. 

Support: Our reader was keen to access the money to make sure his family are provided for

It is never good when companies fail to communicate with customers who are trying to sort their finances, or leave them anxiously waiting for their money due to a painfully slow admin process. 

But when the person in question is trying to take an early pension due to a life-limiting illness, it stops merely being inconvenient and in my opinion becomes cruel. You have also described it in these terms. 

You told Railpen that your time was limited, as you might not be able to manage your own finances for much longer. But still, it made you wait. 

You first contacted me in August, by which time you had waited nine months. The time it takes to claim an early pension can vary, and the medical assessment to prove your claim of ill health which would add time – but the fact this had not occurred in that time is woeful. 

You were told in a letter in November 2023 that you had provided all the documents and evidence needed. But over the following months, you were repeatedly asked for some of these again.

The medical interview, with a third-party occupational health contractor, was organised for May 2024, but it was cancelled without explanation with three days’ notice. 

You also noted that the venue you would have had to attend for this was a two-and-a-half hour drive from your home and did not have parking for disabled visitors. 

When you contacted Railpen in June this year, desperate for answers, you were told the pension manager was ‘waiting for approval for additional costs associated with your referral’ which was why the appointment had been cancelled. 

That is not acceptable in my view. As such a large pension fund, it should do better. 

In a response email you showed me, you said: ‘The way my application has been handled falls far short of what I would have expected from a large utility company pension scheme. Six months and no progress is shocking bearing in mind my condition.’

I contacted Railpen in September, and the pension trustees at Northern PowerGrid then contacted me to say that they and Railpen would expedite your case. 

They did get in touch with you, but still you were plagued by annoying admin. You were asked to send your original birth certificate to Railpen, which you already did – back in November 2023. 

Repeat request: T.M had sent his birth certificate to Railpen last year, but was asked to send it again. This was just one of the multiple delays to his pension claim

The medical interview with a third-party occupational health firm was arranged for October and went ahead this time, over the phone. You were promised a copy of the doctor’s report within three days, which I also had to chase Railpen to organise after it did not materialise. 

Finally, you received a statement this month confirming that you would be entitled to the early pension. 

It gave you two options: a modest lump sum with a small annual pension, or a larger lump sum with a reduced annual pension. 

You opted for the latter and are set to receive a £10,643 lump sum and a £1,596 annual pension. 

Your wife is also entitled to an annual spouse’s pension of £1,238 after your death. 

A spokesman for the Northern PowerGrid pension trustees said: ‘Unfortunately, T.M’s request has not been handled as efficiently as is usually the case due to some administrative issues that should have been identified and corrected more promptly than they were. 

‘We have contacted T.M to apologise for the delay in processing his request and now that we have received the medical report, payment will be made shortly. We are working with Railpen to put in place a process that ensures the delays are not experienced again.’ 

It took a year from you first contacting the pension manager – and my intervention – to get to this point. The money is still not paid, but you have been assured you will receive it soon.

My worry, though, is that other pension savers dealing with serious illness, who happen to be in funds administrated by Railpen, will be going through the same thing. That is not acceptable. 

Your experience is frankly shocking, but I hope that the money makes life a little easier and am glad you can now put this behind you. 

I wish you all the best.