Upheld: failure to provide clear information about pension withdrawal process; breach of own safety net procedures complaint against Aviva Life & Pensions UK Limited
Financial Ombudsman decision DRN-6382104 of 2026-05-26T00:00:00+00:00. failure to provide clear information about pension withdrawal process; breach of own safety net procedures complaint against Aviva Life & Pensions UK Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6382104 |
|---|---|
| Decision date | 2026-05-26T00:00:00+00:00 |
| Firm | Aviva Life & Pensions UK Limited |
| Product | pension |
| Claim type | failure to provide clear information about pension withdrawal process; breach of own safety net procedures |
| Outcome | Upheld |
| Remedy | Aviva must: (1) Calculate the notional fund value as at 26 May 2025 had the TFC not been paid in April 2025, and if the TFC available on that date is higher than the £18,875 paid, pay Mr S the difference with 8% per year simple interest from 26 May 2025 to settlement date; (2) Calculate the current value of Mr S's plan to reflect the 26 May 2025 valuation and either adjust the current value or pay the necessary sum into the plan, allowing for charges and tax relief; (3) If unable to pay into the pension plan, pay compensation directly to Mr S reduced by a notional 20% income tax allowance; (4) Provide Mr S with a simple calculation showing how figures were worked out; (5) Handle any income tax on interest appropriately and provide tax deduction certificates if requested. The £150 compensation already paid is deemed reasonable and no additional compensation for distress is awarded. |
Summary
Mr S held a Personal Pension Plan with Aviva and received a TFC quote on 19 February 2025 for £20,813.92 based on a fund value of £83,255.68. Following market volatility in early April 2025, his fund value declined by approximately 9.3%. When Mr S called Aviva on 11 April 2025 expressing concern, the call handler discussed a 'safety net' process but provided unclear information about how it worked, leaving Mr S expecting a revised quote before payment. However, the TFC was processed on 14 April 2025 at the lower valuation, paying only £18,875. The ombudsman upheld the complaint, finding that Aviva's failure to provide clear information breached its own procedures and misled Mr S about what would happen. The remedy requires Aviva to calculate what TFC would have been available on 26 May 2025 (when the fund had recovered) and pay Mr S the difference with interest, effectively putting him in the position he would have been in had the payment been delayed until market conditions improved.
The Ombudsman's reasoning
The ombudsman found that Aviva failed to provide Mr S with clear information about the safety net process during his 11 April 2025 call. The call handler was unaware of the 10% trigger level and left Mr S with the impression that a revised quote would be issued before payment was processed. Although Mr S's fund had only fallen 9.3% (not triggering the 10% safety net), the unclear communication led Mr S to expect a requote. Given that Mr S was clearly uncomfortable proceeding at the lower valuation and had been prepared to proceed at the February 2025 valuations, the ombudsman concluded that had clearer information been provided, Mr S would likely have asked Aviva to pause the payment. The ombudsman rejected using current fund values (which would give Mr S the benefit of hindsight) and instead determined that fair compensation should be based on the valuation as at 26 May 2025, when the fund value had recovered to approximately February 2025 levels. The ombudsman also noted that HMRC rules prevent unwinding TFC payments, making that remedy unavailable.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Aviva Life & Pensions UK Limited, all decisions | 2,454 | 23% |
Source
Read the original decision on the Financial Ombudsman Service website