Not upheld: pension transfer suitability; loss of guaranteed benefits; increased charges complaint against Quilter Financial Limited

Decision detail

Summary

Mr G, aged 55 with volatile self-employed income, sought advice from Quilter on his pension arrangements. Quilter recommended transferring his Section 32 pension (with a valuable GMP of £10,200 per year from age 65), along with two other pensions totalling under £200,000, to a flexible drawdown arrangement, with Mr G taking a £25,000 tax-free lump sum to repay his mortgage and credit card debts. Mr G accepted the recommendation and repaid his debts as planned. In May 2025, over six years later, Mr G complained that the advice was unsuitable because he gave up a guaranteed lifetime income to access cash he didn't need, as his debts were manageable. The ombudsman found the advice was suitable because Mr G had other guaranteed pension income sources (his two DB pensions plus his wife's DB pension and state pensions) totalling over £31,000 per year, which would meet their retirement needs, and the transfer addressed his genuine immediate financial need arising from volatile income causing credit card accumulation in tight months.

The Ombudsman's reasoning

The ombudsman found that although the transfer resulted in loss of a guaranteed benefit and higher ongoing charges, there was good reason to justify this in Mr G's particular circumstances. The key factors were: (1) Mr G had a genuine immediate financial need driven by volatile income causing him to accumulate credit card debt in tight months; (2) alternatives such as debt restructuring were unlikely to provide material improvement given the low-interest rate environment; (3) crucially, Mr G was not reliant on the Section 32 GMP because he and his wife had other guaranteed pension income sources (two DB pensions for Mr G, one for his wife, plus state pensions) totalling over £31,000 per year, which exceeded their current joint earnings and would meet their retirement needs; (4) the flexible drawdown arrangement was suitable as it provided capital growth potential while maintaining flexibility; (5) Mr G's previous experience in financial services meant he understood what he was giving up; and (6) the recommendation supported Mr G and his wife's desire to enjoy life while they could, given concerns about life expectancy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website