Not upheld: pension administration, early exit charges, and service provision complaint against Zurich Assurance Ltd

Decision detail

Summary

Mr E complained to Zurich Assurance Ltd about its refusal to freeze his pension value on 19 January 2026 and about the early exit fee charged when he transferred his pension to Canada Life for annuity purchase. Mr E argued that Zurich should have frozen the funds on his requested date and should waive the exit fee since Zurich no longer offered annuities, forcing him to transfer. The ombudsman found that Zurich acted fairly by explaining that it could not freeze funds until receiving a valid transfer claim, and that Mr E could have switched to lower risk funds if concerned about value fluctuations. The ombudsman also found the early exit fee of £317.23 was properly applied in accordance with policy terms and FCA guidance capping such fees at 1% for pre-March 2017 policies, and would have applied regardless of transfer or remaining with Zurich. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that Zurich could not reasonably be expected to freeze pension funds before receiving a valid transfer request and documentation, as this is not standard practice for unit-linked pension administration. The ombudsman found that Mr E had the alternative option to switch to lower risk funds if concerned about value fluctuations. Regarding the early exit fee, the ombudsman determined it was properly applied in accordance with the policy terms and FCA guidance capping such fees at 1% for pre-March 2017 policies, and that the fee would have applied regardless of whether Mr E transferred to another provider or remained with Zurich to purchase an annuity.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website