Not upheld: pension transfer refusal and early pension access request complaint against Scottish Widows Limited

Decision detail

Summary

Mr D, who moved abroad, requested SW transfer his pension funds to his overseas bank account and allocate £700 to clear a Lloyds Bank overdraft debt. SW refused without verified address and overseas transfer documentation required by pension regulations and The Pensions Regulator. Mr D proposed accepting £200 compensation for a data breach in exchange for SW writing off the overdraft and keeping his pension, but SW declined. The ombudsman upheld SW's position that strict pension legislation prevents early access and that address verification and QROPS transfer documentation are mandatory regulatory requirements that SW cannot waive. The £200 compensation for the data breach was deemed fair.

The Ombudsman's reasoning

Pensions are heavily regulated and SW must comply strictly with legislation, regulations and scheme rules. The minimum pension age of 55 (rising to 57) is a strict legislative requirement that SW cannot override regardless of the reason for early access. For overseas transfers, TPR requires firms to verify residency or employment links and obtain transfer documentation to a receiving scheme (typically a QROPS). Without the required address verification and transfer documents, SW cannot lawfully proceed. The data breach caused distress and inconvenience warranting compensation, but £200 is fair as there was no financial loss or wider impact.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website