Not upheld: pension fund management and investment performance complaint against Scottish Widows Limited

Decision detail

Summary

Mr L complained that Scottish Widows had mismanaged his personal pension, resulting in a transfer value lower than expected despite his additional £61,500 contributions over seven years. His pension was invested in a Pension Protector Fund and cash, with the fund value peaking in 2021 before declining significantly. The ombudsman found that SW had not made any errors and had properly administered the pension according to Mr L's instructions. The fund's decline was entirely due to unprecedented market volatility in 2022, particularly the collapse in UK gilt values, which affected all investors in similar assets and was beyond SW's control. SW had clearly communicated that investments were not guaranteed and provided Mr L with information to make his own investment decisions.

The Ombudsman's reasoning

The ombudsman concluded that SW had not caused the lower transfer value. SW's role was to administer the pension according to Mr L's instructions and provide information, not to provide financial advice or proactively manage his investment choices. The fund's decline was entirely attributable to unprecedented market conditions in 2022, particularly the collapse in UK gilt values, which affected all investors in similar assets. SW had clearly communicated that investments were not guaranteed and could fluctuate. Mr L had the choice to change his investments but did not instruct SW to do so. The Pension Protector Fund's name and factsheet did not guarantee protection of capital, only that it was designed for those approaching retirement purchasing annuities.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website