FOS pension freedom complaints on the rise

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The number of customers approaching the Financial Ombudsman Service with complaints over pension freedoms is rising, Money Marketing can reveal.

A Freedom of Information request submitted by Money Marketing shows between July 2015 and February 2016 there were 848 new enquiries to the FOS relating to the freedoms.

These include complaints where customers claim they are being forced to take advice, delays in paying cash or transferring pensions, and the existence of exit fees.

This equates to 106 enquiries a month since June 2015, compared to the first three months of pension freedoms where the FOS received 232 enquiries, or 77 a month.

Enquiries are only escalated to official complaints once customers have gone through the provider’s internal complaints process.

In one example a customer complained after a provider blocked payment of a lump sum it had previously said could be carried out non-advised. The firm then reversed its position and imposed an advice requirement and offered to pay £100 compensation.

Personal Finance Society chief executive Keith Richards says: “We have expressed our concerns that consumers were led to believe they had complete freedom and choice and understandably get frustrated when they hit obstacles.

“It has been very poorly positioned which only aggravates consumers even more and we are not satisfied this has been effectively resolved, particularly around insistent clients.

“Until the matter is addressed and processes are amended we are going to continue to get some very frustrated consumers.”