Not upheld: pension retirement options handling and annuity suitability complaint against Aviva Life & Pensions UK Limited

Decision detail

Summary

Mr P's estate complained that Aviva improperly sold Mr P a lifetime annuity when he only intended to take 25% tax-free cash and leave the remainder invested for his widow. Mr P died in February 2025, shortly after the annuity commenced in March 2023, resulting in no death benefits being paid. The ombudsman found that Aviva properly explained all pension options available to Mr P, encouraged him to seek independent advice, and provided comprehensive written information. Although Mr P had speech and processing difficulties from a 2013 stroke, the call handler adapted her approach and the forms Mr P completed clearly indicated his selection of the annuity option. The ombudsman concluded Aviva was not acting as an adviser and was entitled to rely on Mr P's stated choices, finding no evidence that Aviva did anything wrong.

The Ombudsman's reasoning

The ombudsman found that Aviva's role was to provide fair, clear and not misleading information about pension options, not to provide advice. Aviva explained all four options available to Mr P, suggested he seek advice from Pension Wise or an independent financial adviser, and sent comprehensive written information. Although Mr P had some communication difficulties due to his stroke, the call handler adapted her approach and there was nothing in the completed forms to alert Aviva that Mr P did not understand his options. The forms Mr P returned were properly completed and clearly indicated his selection of 25% tax-free cash and a single life annuity. The retirement benefit schedule sent on 10 June 2023 clearly showed the annuity would be paid only during Mr P's lifetime with no dependant's pension, and Mr P did not exercise his 30-day cancellation rights. The ombudsman concluded that Aviva provided sufficient information for Mr P to make an informed decision and was entitled to rely on his stated choices and personal circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website