Not upheld: policy mismanagement, undisclosed charges, methodology changes affecting policy valuations complaint against Liverpool Victoria Financial Services Limited

Decision detail

Summary

Mrs G complained that her two whole of life assurance policies with LV had been mismanaged due to drops in estimated value and that charges had been taken without her knowledge. LV explained that charges were common practice to cover administration, investment management, and life cover costs, and that it had changed its bonus calculation methodology in 2022 and 2024 to ensure fair value, communicating these changes in 2023 and 2025 statements. The ombudsman found the charges reasonable and within industry norms, the methodology changes lawfully communicated, and was not persuaded Mrs G would have acted differently with earlier disclosure, particularly given the policies' death benefits remain higher than premiums paid. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that LV's charges were reasonable and common industry practice for this type and age of policies, with total annual charges of around 2% or less. The methodology changes made by LV in 2022 and 2024 were properly communicated within a reasonable timeframe as required by regulatory rules, and were a reasonable commercial decision to ensure fair value. While the ombudsman acknowledged that LV could have provided clearer information sooner, they were not persuaded that Mrs G would have acted differently if earlier disclosure had been provided, particularly given that the estimated death benefits remain higher than premiums paid and current cash values, and the policies remain in place.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website