Not upheld: Pension transfer advice complaint against Grove Pension Solutions Limited

Decision detail

Summary

Mr G, aged 57 and a full-time carer for his wife, sought advice on transferring his DB pension to purchase an electric 4x4 wheelchair for his wife (costing £10,000) and invest the remainder. Both Mr and Mrs G were on state benefits with significant health conditions, no savings, and £12,000 in debt. GPSL advised the transfer in September 2021, clearly explaining that it was financially disadvantageous (critical yield 8.1%, additional cost of £35,600). Mr G later complained the advice was unsuitable. The ombudsman found the transfer was suitable because the wheelchair purchase was a practical necessity for Mrs G's wellbeing and independence with no alternative funding available, despite the financial disadvantage, and this represented the type of flexible, tailored use of DB transfers Parliament intended.

The Ombudsman's reasoning

The ombudsman applied the FCA's starting assumption that DB transfers are unsuitable unless clearly demonstrated to be in the client's best interests. While the financial analysis showed the transfer would produce lower retirement benefits (critical yield of 8.1% was unrealistic), the ombudsman found compelling non-financial reasons justified the transfer. The purchase of the wheelchair was a practical and powerful necessity for Mrs G's health, wellbeing, and independence, with no alternative funding sources available. The ombudsman rejected the investigator's view that using a pension for such an expensive item was hard to justify, instead deferring to Mr and Mrs G's judgment about what was necessary for their circumstances. Additional supporting factors included potential death benefits advantages and the flexibility Parliament intended for DB transfers.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website