Not upheld: provision of wrong information about pension retirement options and tax treatment of early withdrawal complaint against Scottish Equitable Plc trading as AEGON
Financial Ombudsman decision DRN-6242110 of 2026-04-08T00:00:00+00:00. provision of wrong information about pension retirement options and tax treatment of early withdrawal complaint against Scottish Equitable Plc trading as AEGON. Outcome: Not upheld.
Decision detail
| Reference | DRN-6242110 |
|---|---|
| Decision date | 2026-04-08T00:00:00+00:00 |
| Firm | Scottish Equitable Plc trading as AEGON |
| Product | pension |
| Claim type | provision of wrong information about pension retirement options and tax treatment of early withdrawal |
| Outcome | Not upheld |
| Remedy | Aegon has paid £750 compensation for distress and inconvenience caused by providing wrong information. Aegon has paid £982.06 to compensate for additional tax (£3,362.06 paid versus £2,380 that would have been paid under drawdown). Aegon offered to reinstate Miss T's pension to its original position if she repays withdrawn funds, and to consider covering any tax loss if she cannot reclaim from HMRC. Aegon offered to consider evidence of any other financial losses Miss T suffered. Aegon confirmed Miss T can move remaining pension funds into drawdown if she obtains financial advice. |
Summary
Miss T, under age 55 and suffering serious ill health, sought to access her pension early with Aegon. During a 31 July 2025 call, an Aegon representative initially correctly advised that drawdown was available with financial advice, but after consulting a supervisor, incorrectly told Miss T that drawdown was unavailable due to her age and she could only access partial or full encashment. Miss T subsequently withdrew £13,000 through partial encashment, paying £3,362.06 in tax versus the £2,380 she would have paid under drawdown. Aegon paid £750 compensation for the wrong information and later paid an additional £982.06 for the excess tax. The ombudsman found Aegon's actions and remedies fair and reasonable, rejecting Miss T's complaint as the error did not cause substantial sustained distress and the compensation appropriately addressed the financial and non-financial impacts.
The Ombudsman's reasoning
The ombudsman found that Aegon did provide wrong information during the 31 July 2025 call by initially stating drawdown was available then incorrectly stating it was not available due to Miss T's age. However, the ombudsman concluded Aegon was not responsible for delays in payment processing, as it acted within reasonable timescales for the serious ill health claim and pre-funded part of the withdrawal to expedite payment. The ombudsman determined that £750 compensation for distress and inconvenience was appropriate given the impact lasted several weeks rather than months or years, and that the additional £982.06 tax compensation was fair. The ombudsman rejected the claim for higher compensation, finding the error did not cause substantial distress, humiliation, or serious disruption over a sustained period.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Scottish Equitable Plc trading as AEGON, all decisions | 3 | 0% |
Source
Read the original decision on the Financial Ombudsman Service website