Not upheld: Other regulated complaint complaint against ReAssure UK Services Limited

Decision detail

Summary

Mr B complained that ReAssure refused to allow him to cash in his small annuity worth approximately £40 per year, which he had taken in January 2014 following early retirement from his personal pension. Mr B argued this was unreasonable and unethical, particularly as the annuity provided minimal income. The ombudsman found that while commutation legislation permitted providers to cash in annuities under £10,000 at their discretion, Mr B had no legal right to this option. Although Mr B would likely benefit personally from a lump sum payment, ReAssure's refusal was fair and reasonable given legitimate business considerations including the annuity's design, illiquid backing assets, operational complexity, and fairness to other customers. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Mr B would likely benefit personally from receiving a cash lump sum instead of the minimal annual annuity payment, ReAssure had legitimate business interests to consider. These included: the annuity product was not designed for commutation, the backing assets were illiquid, treating one customer differently could create inconsistency and fairness issues with other customers, and there were significant financial and operational implications. The ombudsman concluded that Mr B had no legal right to commutation and that ReAssure's discretionary refusal, while treating him consistently with other customers, was fair and reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website