Partially upheld: irresponsible administration, inconsistent information provision, failure to clarify policy terms and pension access options complaint against Scottish Equitable plc (Aegon)

Decision detail

Summary

Mr P complained to the Financial Ombudsman Service about Scottish Equitable plc (Aegon) regarding his personal pension policy taken out in 1990, alleging that Aegon had provided years of inconsistent and incorrect information about his policy terms and conditions and pension access options. The key issues were: (1) whether confusion about policy terms and available options prevented Mr P from accessing the policy before his Normal Retirement Date in November 2023; (2) confusion about which version of Terms and Conditions applied (PP1, PP1A, or PP3); (3) uncertainty about what pension freedom options were available; (4) a failed attempt to arrange a partial transfer to another provider; and (5) Aegon's refusal to waive an £800 early surrender charge or ongoing adviser fees for the ARC platform. The ombudsman found that while Aegon had serious shortcomings in its administration and communication, Mr P was not prevented from accessing the policy earlier, as his decision to wait until his NRD had passed was driven by his unwillingness to pay the early surrender charge. The ombudsman upheld the complaint in part, awarding £850 compensation for distress and inconvenience and directing Aegon to pay Mr P's reasonable adviser fees for transfer advice and to facilitate timely processing of any future transactions.

The Ombudsman's reasoning

The ombudsman found that while Aegon had serious shortcomings in providing inconsistent and incorrect information about policy terms, conditions, and access options over several years, Mr P was not prevented from accessing the policy earlier. The key finding was that Mr P's decision not to access the policy before his NRD was driven by his unwillingness to pay the £800 early surrender charge (which Aegon was entitled to enforce as a policy term), not by the confusion about policy options. The ombudsman noted that Mr P chose to access other pensions around November 2023 when he needed income, and only began planning to access this policy in April 2024 after his NRD had passed. The ombudsman rejected Mr P's argument that the confusion about multiple issues precluded him from taking benefits, noting that consumers should generally access benefits if needed and any calculation issues would be addressed separately. However, the ombudsman acknowledged the considerable distress caused by years of confusion and inconsistent information, and upheld compensation for this.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website