The Pensions Ombudsman has ruled in favour of Scottish Widows following a complaint that the provider’s delay in processing a pension fund transfer led to a client losing nearly £1,500.
The client, called Mr D in The Pensions Ombudsman’s decision, was due to retire in August 2015, and had been sent two wake-up packs in March and June that year from Scottish Widows, quoting his fund values as £36,101 and £36,406 respectively.
Mr D phoned the provider a week before his retirement date to say he wanted to take his 25 per cent tax-free lump sum, then go into flexible access drawdown.
However, Scottish Widows said this could not be done immediately as it would require a different team to process it.
A telephone appointment was made for the day before Mr D’s retirement date, and Scottish Widows told Mr D he would not lose out because of the wait and they could set up the new policy in the appointment.
While Scottish Widows told Mr D they were not able to provide advice, it highlighted the existence of a ‘parking fund’, which would not decrease in value, that Mr D could put his money in while he weighed up his investment options.
Mr D decided he wanted to review the available funds, so set up another telephone appointment a week later, where the new policy was set up and the remaining transfer requirements were completed after Mr D confirmed his fund choices.
In the confirmation letters sent, Mr D’s fund value as at 10 August 2015 was £36,863. However, after the transfer was completed on 25 August, the final amount transferred was £35,397.
Mr D complained about the fall in fund value quoted compared to what was actually transferred, and asked for £2,366 in compensation to reflect the time he spent on the phone with the provider.
The decision says: “The drop in value was caused by a downturn in the financial market. Scottish Widows refused to honour the retirement date of 19 August 2015, as they state that Mr D requested time to review the fund choices available to him.”
A Pensions Ombudsman adjudicator said it was “unreasonable for Mr D to request that the higher amount be honoured”, and that Scottish Widows had told him final figures may differ because he would remain invested until the funds were transferred.
The adjudicator said: “Mr D may have suffered a loss of expectation but no financial loss has been found.”
Complaint thrown out
Mr D then took the complaint to Pensions Ombudsman Anthony Arter, adding that Scottish Widows call operatives had sounded “bored and tired” on the phone and did not recall being told about the parking fund available that would have kept his fund value constant.
Arter dismissed the complaint in a decision released today.
Arter said the phone operative had become frustrated, but only because Mr D had repeatedly asked them to give advice they were not qualified to provide.
Arter says: “The call operative on 18 August 2015 became frustrated and his tone could be interpreted as dismissive during the call. However, the operative informed Mr D a number of times that all of the information was available in the guide and that he was unable to provide advice. As Mr D kept asking for advice regarding the funds the call operative suggested Mr D went away to consider his options and arranged for another telephone appointment.”
Arter added that he did “not see what more Scottish Widows could have done” to tell Mr D about the parking fund.
Arter says: “It is unfortunate that Mr D does not recall this but I cannot agree that it was not discussed when it was discussed at length during the call.”