Upheld: misleading advice / failure to provide accurate information complaint against NFU Mutual Select Investments Limited

Decision detail

Summary

Mr H complained that an NFU Mutual adviser misled him about the amount of tax-free cash available from his pension, stating £180,000 could be withdrawn when only £54,208 was actually available. Mr H had held fixed protection on his Lifetime Allowance of £1.5m and had made multiple withdrawals over the years. The adviser calculated the figure by deducting previous withdrawals from the theoretical maximum without verifying the actual uncrystallised fund balance. Although Mr H proceeded with a smaller withdrawal and could not purchase the intended land plot, he had not committed to the purchase before receiving correct figures, so suffered no direct financial loss. The ombudsman upheld the complaint and awarded £500 total compensation (£400 additional to the £100 already paid) to reflect the loss of expectation and disappointment caused by the adviser's error.

The Ombudsman's reasoning

The adviser made an error by calculating available tax-free cash based on the theoretical maximum under fixed protection (£375,000 minus previous withdrawals = £180,000) without verifying the actual balance of uncrystallised funds in the accumulation pot. The correct available amount was only £54,208 (25% of £216,835). However, this constituted a loss of expectation rather than financial loss, as Mr H had not committed to the land purchase before being given correct figures. The adviser's error did not prevent the purchase; rather, Mr H's actual pension balance was insufficient. Compensation for disappointment and inconvenience is appropriate, but not for costs incurred by Mr H's choice (accountant fees, daughter's time off).

How this compares

Source

Read the original decision on the Financial Ombudsman Service website