Upheld: Pension transfer advice complaint against JAMES HAY ADMINISTRATION COMPANY LIMITED
Financial Ombudsman decision DRN-6043709 of 2026-01-28T00:00:00+00:00. Pension transfer advice complaint against JAMES HAY ADMINISTRATION COMPANY LIMITED. Outcome: Upheld.
Decision detail
| Reference | DRN-6043709 |
|---|---|
| Decision date | 2026-01-28T00:00:00+00:00 |
| Firm | JAMES HAY ADMINISTRATION COMPANY LIMITED |
| Product | Pension |
| Claim type | Pension transfer advice |
| Outcome | Upheld |
| Remedy | James Hay must: (1) Pay 8% simple interest on the £75,000 withdrawal from 1 April 2025 to 30 May 2025 (calculated as £769.72 or £615.78 after 20% income tax); (2) Compensate Mr S for any additional tax incurred as a direct result of the delayed payment in the 2025/2026 tax year, subject to appropriate evidence; (3) Pay £350 compensation for distress and inconvenience caused. If compensation is not paid within 28 days of Mr S's acceptance, 8% simple interest per year applies from the deadline date to payment date. |
Summary
Mr S complained that James Hay caused unnecessary delays to his requested pension income withdrawals of £75,000 each in March and April 2025. Mr S had requested James Hay set up a regular instruction to pay outstanding fees of £1,193 from his investment manager, and James Hay confirmed on 29 January 2025 that it had made this request. However, James Hay failed to follow up when the payment was not received and did not notify Mr S, leading him to reasonably believe the fees would be settled. When funds were received on 25 March 2025, James Hay automatically deducted the fees on 28 March 2025, leaving insufficient funds for the 1 April 2025 payment. The withdrawal was eventually paid on 30 May 2025, forcing Mr S to receive both withdrawals in the 2025/2026 tax year instead of the separate tax years he had planned, resulting in additional tax liability. The ombudsman upheld the complaint and ordered James Hay to pay 8% interest on the delayed payment, compensation for additional tax incurred, and £350 for distress and inconvenience.
The Ombudsman's reasoning
The ombudsman found that while Mr S bore responsibility for monitoring his SIPP bank account under the terms and conditions, James Hay created a reasonable expectation that it would settle the outstanding fees when it confirmed on 29 January 2025 that it had requested manager F to transfer £1,193. James Hay's failure to follow up with manager F or notify Mr S that the fees remained outstanding meant it caused avoidable delays. However, the ombudsman could not hold James Hay responsible for delays in February 2025 caused by Mr S not providing required documentation, as the revised SIPP income instruction form and instruction to trade form clearly explained the requirements. The automatic deduction of fees on 28 March 2025 was in line with the SIPP terms and conditions and James Hay's stated policy. The payment should have been made by 1 April 2025 but was delayed until 30 May 2025, causing Mr S to lose the benefit of making withdrawals in separate tax years and incur additional tax liability.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| JAMES HAY ADMINISTRATION COMPANY LIMITED, all decisions | 9 | 33% |
| Pension transfer advice, all decisions | 7,542 | 54% |
| Pension, all decisions | 15,579 | 47% |
Source
Read the original decision on the Financial Ombudsman Service website