Consumers sometimes contact us with complaints about the advice they received to transfer their pension benefits to a new arrangement. This could be from one type of personal pension to another, such as a personal pension to a Self-Invested Personal Pension (SIPP), or from a workplace pension to a personal pension or SIPP.
This note deals with transfers from one personal pension to another.
Types of complaints we see
Consumers may complain that when you advised them to transfer their pension benefits, you:
- didn't take into account the loss of guarantees in a personal pension arrangement - such as guaranteed annuity rates (GARs)
- didn't make them aware that a market value adjustment (MVA) could be applied to their with-profits pension fund when transferring to another arrangement
- didn't make them aware they could pay increased charges by redirecting their pensions contributions
- exposed them to unsuitable types of investments in the new arrangement
If the complaint is that you unsuitably advised a consumer to transfer the benefits from their occupational pension scheme – or didn’t carry out a “pension review” in line with the regulator’s guidance, this is covered in our separate note.
What we look at
When we look at a consumer’s complaint, we’ll look at the specific circumstances of the case and the points put forward by both sides. We’ll take into account:
- the reasons for the transfer and why it was thought to be in the consumer's best interests
- the suitability of the investments in the new arrangement - find out more about assessing the suitability of investments
- what information you gave the consumer at the time of the transfer - including the up front and ongoing costs of the new arrangement
Handling a complaint like this
Consumers need to complain to you first so that you have a chance to put things right. We only look at complaints you've had an opportunity to look into first. If a customer complains and you don't respond within the time limits - or they’re dissatisfied with your response - they can come to us.
Find out more about how to resolve a complaint.
Putting things right
If we uphold a consumer’s complaint, we’ll ask you to put things right.
For complaints about the administration of a GPP, this could take the form of reconstructing the value of a policy if contributions have been applied late - this may involve the GPP provider applying extra units to a plan. If documents have been sent to a wrong address, or originals have been mislaid, we might make an award for the inconvenience this has caused, or to cover the cost of replacing the originals.
For complaints involving a SSAS or EPP, if they involve administration issues the redress would be particular to what has gone wrong. If we decide that the investments within those plans are unsuitable, redress could take the form of financial compensation paid to the pension plan or directly to the consumer and/or reconstructing pension plans where possible.
We might also make an award for any trouble and upset caused.
Find out more about how we award compensation.
Unhappy consumer because of advice to change pension type
Consumer is unhappy about transfer of her pension fund
Pensions Pension Transfers
Businesses and consumer advisers can contact our technical desk on 020 7964 1400 for general information on how the ombudsman might look at a particular complaint, or for guidance on our rules and how we work. Or you can search our database of published ombudsman's decisions.
Our work gives us an insight into how complaints arise and how they might be avoided in the future. Find out more about the ways we share our knowledge and experience.