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High Court overturns Ombudsman in landmark pension liberation ruling


A landmark High Court ruling against Royal London has put pensions savers at increased risk of pension liberation scams, lawyers warn.

In a judgement today, the High Court overturned a Pensions Ombudsman decision that sided with Royal London over a suspicious £8,000 transfer to a SSAS in 2014.

The ruling comes after Donna-Marie Hughes appealed the Pension Ombudsman’s July 2015 decision that backed Royal London. The Ombudsman argued Hughes did not have relevant earnings and so did not have a statutory right to transfer.

But Justice Morgan said: “As it is agreed that Ms Hughes was an earner by reason of her earnings from another source or sources, it follows that she was entitled to require Royal London to transfer the cash equivalent of her accrued rights under her PPS so that she would be awarded transfer credits in relation to her OPS.

“I will therefore allow Ms Hughes’ appeal on this first ground.”

Pinsent Masons pensions litigation partner Ben Fairhead advised Royal London.

He says while the decision brings clarity it will also be “far easier for individuals to move their money from legitimate schemes, ultimately leading to a potential influx of monies into suspicious schemes as the hands of those being asked to make transfers are increasingly tied by the inflexibility of the law”.

Prior to today’s ruling providers relied on requesting proof the member had an earnings relationship with the receiving scheme to slow down susipicious transfers, says Fairhead.

Fairhead says the decision creates a “great deal of uncertainty in the battle against pension scams.”

A Royal London spokesman says: “Pensions Liberation and pensions fraud raise serious concerns for providers like Royal London. We therefore take transfer requests very seriously and look out for the warning signs highlighted by the regulators and relevant guidance.

“In spite of what we might find, if a customer  has a statutory right to a transfer then there is very little we can do if the customer wants to proceed. The transfer must be allowed.

“This judgement provides greater clarity on the circumstances which determine when that statutory right exists and we will obviously comply with the court order relating to Ms Hughes’ transfer.

“Royal London’s concern has only ever been to comply with the regulatory guidance and to assist our policyholders to avoid circumstances where they risk losing all or part of their pension benefits.”



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There are 5 comments at the moment, we would love to hear your opinion too.

  1. If this all goes pear shaped, who takes the hit.

  2. Read the judges decision and anyone with the smallest amount of legal training SHOULD have seen the insurers were misimterpreting the law. This should NEVER have needed a judge to have to conclude this. I told you so Sam B and Scot Widows. Now ait for the counter claims for defamation of character where pension liberation and dishonesty were implied when none existed, this was often just either protectionism or rules which ignored legal rights with internal legal departmemts whose staff seem to have less idea than leyman with A level or equivalent knowledge of what the law says but a better understanding of what is right or wrong…… idiots.

    • headbelowthe parapet 24th February 2016 at 12:08 pm

      Hi Philip – I thought this case was about a non-regulated adviser moving money into a questionable SIPP (inasmuch as it was skirting around the edges of the rules) to invest in a Gibraltar based property firm who were investing in holiday lets in the slightly unstable African island of Cape Verde?

  3. As this transfer was only for £8000 and the litigation must have cost many times that, I presume that this was a trial case to prove a point of law.
    Once again compliance (costing a fortune) not knowing the legal position before making rules.

  4. Not sure how she was a member of an Occupational Pension Scheme with no Relevant Earnings.

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