Not upheld: unsuitable pension advice and administrative failure complaint against Aviva Life & Pensions UK Limited

Decision detail

Summary

Mr M complained that Aviva provided unsuitable advice in 1989 to contract out of SERPS and make personal pension contributions, claiming he suffered financial loss. He also complained that his contracted-out benefits were paid at age 62 rather than age 65, and that Aviva failed to respond to his Data Subject Access Request. The ombudsman found the original advice was suitable given Mr M's age, earnings, and circumstances at the time, and that the 2008 benefit payment was permissible under pension rules that had changed in 2006. While Aviva failed to respond timely to the DSAR, it offered compensation of £400 which the ombudsman considered fair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that at the time of advice in 1989, contracting out of SERPS was suitable for Mr M because he was significantly below the pivotal age of 51, had earnings above the lower earnings limit, had no occupational scheme available, and had a reasonable investment horizon. The rules changed in 2006 to allow protected rights benefits to be accessed at age 50, making it permissible for Aviva to pay all benefits at age 62 in 2008. The ombudsman rejected the claim that separate policies were created for Aviva's financial benefit, noting they were tracked separately due to different regulatory rules but invested in the same account. The ombudsman noted that poor investment performance alone does not constitute unsuitable advice, and Mr M was provided with required regulatory illustrations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website