Scottish Widows Personal Pension Plan (PO-9526)

Ombudsman’s Determination

Outcome

Mr W’s complaint against Scottish Widows is partly upheld. To put matters right, (for the part that is upheld), Scottish Widows should pay Mr W £500 compensation for the significant distress and inconvenience caused to him by their admitted failings in this case.

My reasons for reaching this decision are explained in more detail below.

Complaint summary

Mr W’s complaint against Scottish Widows, the Plan provider, is that they incorrectly informed him on numerous occasions that a lump sum payment amounting to £29,112.08, in respect of a single contribution made by his previous employer, could be paid into the Plan. He was subsequently informed by Scottish Widows that this was not possible.

Mr W asserts that Scottish Widows should reimburse the subsequent costs amounting to £4,958, that he incurred in having to set up a SIPP in order to receive the £29,112.08 payment. He says that these costs would not have arisen, had Scottish Widows correctly informed him that the Plan was unable to accept the payment, when he made his initial enquiries.

Mr W says the costs in question, mainly comprised of travel expenses to the UK to establish the SIPP.  He maintains that if Scottish Widows had made him aware earlier that the transfer was not possible, then he could have arranged the SIPP with a UK based financial adviser during one of his regular trips to the UK. Also, if he was given more time to sort out an alternative pension provider, the financial adviser’s fees that he incurred could have been significantly reduced, as the fee charged doubled due to the urgency in arranging the SIPP. He also claims that he could have selected a financial adviser in the United Arab Emirates (UAE), where he resides, as they usually charge zero fees to the client.

Mr W says that fortunately he was able to negotiate a one month time extension with Mercer, (the administrators of his previous employer’s scheme), to find a suitable alternative pension arrangement to accept the payment. However, he was constrained by the limited time given by Mercer to arrange this. He also lost the opportunity of selecting previous investment options organised by his trade union, during the administration period between 2012 and 2014.

Mr W contends that Scottish Widows should provide adequate compensation for the distress and inconvenience he has suffered because of their errors.