Not upheld: pension annuity overpayment after death complaint against Rothesay Life Plc

Decision detail

Summary

Mrs B's estate complained that Rothesay Life Plc incorrectly requested repayment of a £3,558.65 annuity payment made on 6 March 2025, two days after Mrs B's death on 4 March 2025. Mr B argued that because the annuity was paid yearly in arrears, the payment should not be repaid and had been used for funeral expenses. The ombudsman found that Mrs B's annuity contract contained no provision for any payment following death, that the payment was made before Rothesay became aware of Mrs B's death, and that Rothesay's request for return through the named executor was reasonable. The complaint was not upheld and no award was made.

The Ombudsman's reasoning

The ombudsman found that Mrs B's annuity contract explicitly contained no provision for any payment following her death, and that selecting an annuity without such provision resulted in higher lifetime income. Although the annuity was paid yearly in arrears, this did not create an entitlement to a final proportional payment. The payment made on 6 March 2025 was issued before Rothesay became aware of Mrs B's death and there was insufficient time to prevent it. Rothesay's request for return was reasonable as the payment was made in error and the executors were appropriately contacted regarding the estate's obligation to return it.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website