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Ombudsman rules against ‘woefully inadequate’ Hornbuckle


Sipp provider Hornbuckle has been ordered to pay at least £25,000 to a customer after errors led to a £537,357 unauthorised payment.

The Pensions Ombudsman said Hornbuckle should reimburse Michael Williams fees for its “woefully inadequate” services as well as tax consultancy, financial advice fees, and potential unauthorised tax charges.

Williams had three flexible income drawdown products with the provider. In 2009 Hornbuckle told Williams’ adviser the maximum yearly pension available was £537,835.

The adviser asked for this payment to be made immediately, with another payment of the same amount made as near in the next tax year as possible.

But both payments were made within the same pension year and exceeded the recalculated income for that year, resulting in an overpayment of £535,513.89.

Hornbuckle realised the mistake in 2013, four years later. It asked for the full amount to be repaid, warning of the risk the overpayment would be treated as an unauthorised payment and subject to tax charges.

The firm apologised for the error but say they were not wholly responsible and that compensation should not be paid.

It is not yet known what the tax charge on the overpayment will be, but Williams says he paid £10,434 for tax consultancy, £12,375 in financial adviser fees and £257 in accountancy fees as a result.

Pensions ombudsman Anthony Arter says Hornbuckle should have warned the adviser of the potential for an overpayment and could have used its powers to impose restrictions on the timing of payments.

A Hornbuckle spokesman says: “This is a legacy error uncovered and reported by us in 2013.  We have worked with the parties to ensure no financial detriment to Mr Williams and the POS has agreed our position.”



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

  1. Gordon Sinclair 30th July 2015 at 7:53 pm

    Mistakes happen.

    Bit unfair for HM to attract this negative publicity as they did put their hands up.

    And didnt the adviser check the figures?

  2. @Gordon. I know what you mean, but our firm has had some awful experiences with HM and I can;t help feeling a sense of justification that this has happened. They have cocked up PIPs for two clients, both of which led to complaints against us on the basis of tax charges. One was clear-cut and they took responsibilty, which is fair enough; they fought the other one tooth and nail and just would not accept any shred of responsibility, despite a total failure to be able to make or stick to a decision.

    Basically, the first PIP should have been defined according to a different set of rules than is currently applied. This would have meant a different default end date, with us able to nominate subsequent PIPs accordingly, within the rules and suited to our client. None of their documentation stated that they had their own interpretation of ‘end date’ for the initial PIP, which started the issue. At first, they acknowledged an error, then they said they didn’t, then they eventually changed the inital PIP date, which indicated error, but they refused to pay any compensation to our client. Yes, we take some resposnbility as advsiers and we did identify the issue, but HM were stubborn, unhelpful and would not meet us halfway. We had talks with directors, compliance staff, technical staff and no one could provide a joined up view. This process dragged on for months and it was the client who suffered. We paid him some of what he was looking for in the end, but we feel very strongly that HM acted badly in this matter.

    We used to have a white labelled SIPP through them, which was great at first, but they just went downhill. Admin is woeful, messages are inconsistent etc.

  3. I wonder if providers ever think how many advisers actually read these kind of threads! If they took note that negative publicity is actually shared (as well as positive) like this within our community – they would realise that in cases of error – it really is best practise to come clean and work with us and not against us – for a good outcome for everyone – especially our mutual clients!

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