Not upheld: incorrect pension withdrawal processing and misleading information about cancellation rights complaint against Interactive Investor Services Limited (trading as Interactive Investor)

Decision detail

Summary

Mr M requested a £100,000 tax-free withdrawal from his SIPP and sought guidance from Interactive Investor. Although II provided clear information about PCLS options and offered support, Mr M submitted his online withdrawal request as a UFPLS instead, resulting in approximately £30,000 in tax charges. II subsequently made an error by telling Mr M he had cancellation rights, which it later acknowledged was incorrect. The ombudsman found that II's pre-submission communications and online form were sufficiently clear, that Mr M's selection of UFPLS was his own mistake, and that the £80 compensation for the cancellation rights error was fair and reasonable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that II provided clear information about the differences between UFPLS and PCLS, including tax implications, and offered support. The online form clearly distinguished between the two options and warned of tax consequences. While II made an error in telling Mr M he had cancellation rights, this did not influence his decision to select UFPLS (which he selected by mistake) and did not cause financial loss beyond what he would have suffered anyway. The £80 compensation was appropriate for the wrongly raised hopes and inconvenience. II was not required to allow cancellation given the September 2025 HMRC and FCA clarification that cancellation rights do not apply to UFPLS or PCLS payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website