Pension campaigner Ros Altmann says the Government’s decision to ignore the Parliamentary Ombudsman’s damning report into its treatment of pensioners who lost their final-salary schemes calls into question the entire ombudsman system in the UK.
Last week, the Government was forced to defend itself in the High Court against accusations that it unlawfully ignored Parliamentary Ombudsman Ann Abraham’s report. The ombudsman found the Government had sent out misleading leaflets to 125,000 pensioners assuring them their pensions were safe.
Altmann, head of the Pensions Action Group which is representing the claimants, says the Government’s argument that the Parliamentary Ombudsman’s decision is not binding raises serious questions over the powers of independent ombudsmen, including the Financial Ombudsman Service.
She says if the Government can ignore ombudsman rulings, then advisers should be able to ignore FOS rulings.
The verdict in the case is expected shortly.
The Government is also claiming that the information in Department for Work and Pensions leaflets sent to pensioners did not constitute advice.
Altmann says this is an “absurd” argument and that the information, which encouraged people to stay in their final-salary schemes, would clearly be deemed as advice if sent out by an IFA.
Altmann says: “If the Government wins this case on the basis of saying that the Parliamentary Ombudsman’s decision is not binding, then financial advisers should be able to raise the same objections about the FOS. IFAs could ignore FOS judgments.
“This calls into question the whole ombudsman system in the UK.”