Not upheld: Pension transfer advice complaint against ReAssure UK Services Limited

Decision detail

Summary

Mr R complained that ReAssure gave him incorrect information about his income protection policy, specifically regarding whether lump sum pension withdrawals would reduce his monthly benefit. ReAssure's July 2014 letter stated lump sums would not be deducted, but after pension legislation changed in 2015, Mr R made additional lump sum withdrawals in 2016 that ReAssure later determined should have been deducted from his benefit. The ombudsman found that the policy terms clearly allowed deductions for any pension income, ReAssure sent a clarifying letter in August 2015 before the disputed withdrawals, and Mr R was aware of pending legislation changes. Therefore, the complaint was not upheld, and the ombudsman found it reasonable for ReAssure to recover overpayments over five years.

The Ombudsman's reasoning

The ombudsman found that while ReAssure's July 2014 letter was accurate at the time, the policy terms clearly allowed deductions for any income from a pension regardless of whether it was regular or one-off. The distinction between 'regular' and 'one-off' payments was not material to the policy terms. Critically, ReAssure sent an August 2015 letter explicitly clarifying that pension withdrawals would be deducted from benefits, which was sent before Mr R made the disputed withdrawals in 2016. Mr R was aware of pending pension legislation changes and had received independent financial advice, so he should have questioned ReAssure before making withdrawals rather than relying on outdated information. The ombudsman found it reasonable for ReAssure to recover overpayments over five years through reduced monthly payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website