Not upheld: pension tax-free cash calculation and withdrawal delays complaint against Hargreaves Lansdown Asset Management Limited (HLAM)

Decision detail

Summary

Mr Z complained to HLAM about his tax-free cash withdrawal from his SIPP, claiming he was entitled to £146,251.23 but received only £19,704.04. The dispute centred on how much of his lifetime allowance had been used via his NHS pension scheme. HLAM based its calculation on Mr Z's P60 showing 93.07% usage, while Mr Z claimed only 11.8% had been used and that his figures were independently verified. Despite multiple requests, Mr Z never provided supporting evidence for his position. The process took approximately 10 months from initial request to payment, with delays attributed to both HLAM's initial slow response and Mr Z's failure to promptly provide requested information. The ombudsman upheld HLAM's calculation and found the £300 compensation offered was fair, as HLAM could not reasonably make a payment without proper documentation to support the claimed allowance.

The Ombudsman's reasoning

The ombudsman found that HLAM's calculation of Mr Z's tax-free cash entitlement was based on solid evidence (the P60 showing 93.07% lifetime allowance usage) and was mathematically correct under the post-April 2024 rules. While Mr Z claimed his figures were independently verified, he failed to provide any supporting evidence despite multiple requests. The ombudsman noted that HLAM could not reasonably make a payment without proper documentation, as overpayment could result in HMRC penalties. The delays were attributed primarily to Mr Z's failure to respond promptly to HLAM's requests for clarification, rather than HLAM's conduct. HLAM's initial response delay of over one month was noted as poor service, but this was outweighed by Mr Z's responsibility for subsequent delays. The ombudsman found HLAM acted fairly in requiring evidence before calculating the allowance and in eventually paying based on the P60 information.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website