Partially upheld: Account administration errors complaint against Rothesay Life Plc
Financial Ombudsman decision DRN-5983306 of 2025-12-11T00:00:00+00:00. Account administration errors complaint against Rothesay Life Plc. Outcome: Partially upheld.
Decision detail
| Reference | DRN-5983306 |
|---|---|
| Decision date | 2025-12-11T00:00:00+00:00 |
| Firm | Rothesay Life Plc |
| Product | Pension |
| Claim type | Account administration errors |
| Outcome | Partially upheld |
| Remedy | Rothesay must: (1) pay Mr T £2,000 compensation for distress and inconvenience (less any amount already paid or which Mr T agrees to set off against the overpayment); (2) arrange a repayment plan if recovery causes Mr T financial difficulty, based on his assets, liabilities and affordability; (3) continue amended annual payments to prevent further overpayments. Mr T may choose to offset the £2,000 compensation against the £73,864.75 owed or keep it separate. |
Summary
Mr T complained that Rothesay overpaid his pension benefits following a Pension Sharing Order that awarded his ex-wife 61.12% of his pension value. In August 2024, Rothesay paid him £106,233.94 tax-free cash and an annuity of £13,511.04 net pa, but discovered in April 2025 that the correct amounts should have been £41,229.87 and £5,238.00 respectively, seeking repayment of £73,864.75. Mr T argued he should not have to repay as he made life-changing retirement decisions based on the quotations and had questioned whether they accounted for the PSO. The ombudsman found that Mr T should have reasonably questioned the quotations since his pension remained at similar levels (£19,786 pre-divorce to £20,931-£21,728 post-divorce) despite the 61.12% reduction, and that no call recording confirmed he specifically asked about the PSO. Therefore, Rothesay was entitled to recover the overpayment, but the ombudsman upheld the complaint in part by ordering £2,000 compensation for distress and requiring a repayment plan if recovery would cause financial hardship.
The Ombudsman's reasoning
The ombudsman found that while Rothesay was entitled to rely on data from the previous scheme administrators, an error was made resulting in overpayment. Mr T did not have a valid change of position defence because he should have reasonably questioned the quotations: his pre-divorce pension was £19,786 pa and post-PSO quotations showed similar or higher figures (£20,931-£21,728 pa) despite his ex-wife receiving 61.12% of benefits. The CETV also increased significantly from £165,243.68 to £432,636.23 in one year, which should have prompted enquiry. Although Mr T claimed to have called to verify, no call recording confirmed he specifically asked about the PSO. Therefore, Rothesay is entitled to recover the overpayment, but Mr T is entitled to compensation for distress and a repayment plan if needed.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Rothesay Life Plc, all decisions | 26 | 14% |
| Account administration errors, all decisions | 25,844 | 25% |
| Pension, all decisions | 15,579 | 47% |
Source
Read the original decision on the Financial Ombudsman Service website