Not upheld: General financial advice complaint against Scottish Widows Limited

Decision detail

Summary

Mrs W complained that Scottish Widows Limited failed to inform her that her late husband's pension funds would be disinvested from the date she notified them of his death (3 April 2025) rather than the actual date of death (16 February 2025). Due to volatile market conditions during this period, Mrs W claimed she suffered financial disadvantage and that Scottish Widows breached the Consumer Duty by not allowing her to seek financial advice on the timing of notification. The ombudsman found that Scottish Widows acted in accordance with the explicit pension plan terms and conditions, which specified disinvestment upon notification of death. The ombudsman rejected the Consumer Duty breach argument, noting that market movements could not be predicted and that disinvestment protected the fund value from investment risk, consistent with industry practice and HMRC regulations.

The Ombudsman's reasoning

The ombudsman found that Scottish Widows acted in accordance with the explicit terms and conditions of the pension plan by disinvesting funds from the date of notification rather than the date of death. While the ombudsman acknowledged it would have been good customer service to expressly inform Mrs W that disinvestment had been triggered, this would not have changed the outcome. The ombudsman rejected the argument that Scottish Widows breached the Consumer Duty, noting that market movements could not be predicted and that disinvestment protected the fund value from investment risk. The ombudsman also noted that Scottish Widows' process is consistent with other pension providers and HMRC regulations requiring payment within two years of notification.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website