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Ombudsman rules against providers over pension transfer delay

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The Pensions Ombudsman has upheld a complaint against Axa Wealth and St James’ Place following a bungled pension transfer from 2012.

Graham Burton complained that SJP took an unacceptable amount of time to send a £191,000 transfer cheque to Axa Wealth after it disinvested his drawdown pension.

Burton says he suffered financial loss as an investment he eventually made with part of his fund bought 3,000 fewer units because of the delay.

Axa offered to pay £1,088.62 in compensation for his loss but Burton referred his complaint to the Ombudsman.

Axa’s policy is to invest a transfer value and pay income only on the receipt of a P45, but SJP delayed sending the form due an “internal administrative error”.

The cheque was then cancelled by St. James’ Place because their bank told them it had been lost in the clearing process.

Deputy ombudsman Jane Irvine says while Axa’s policy of waiting until in receipt of a P45 means customers do not have to reclaim overpaid tax, there are “significant drawbacks” in this approach.

She says: “Whilst his transfer value remained as cash in Axa’s suspense bank account, Mr Burton was out of the market as the transfer was taking place. This might have worked in Mr Burton’s favour if the market fell but it rose and he did not therefore benefit from any investment growth while he held cash.”

She ruled that Axa and St James’ Place should split the cost of providing Mr. Burton with the correct number of units.

In addition, the firms are to pay £50 each in recognition of the distress and inconvenience caused to Mr. Burton.



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. I have been unable to transfer funds from a SSAS scheme, due to possible tax implications regarding IP valuations.This has been an ongoing issue between HMRC and Morgan Lloyd since December 2012. How can I best redress this?

  2. Not sure from your question what you were trying to transfer to. I assume the funds are still in the SSAS.

    What is IP?.

  3. Intellectual Property, either purchased directly by the SSAS or used as security for a Loanback.

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