Friends Life (PO-9935)

Ombudsman’s Determination

Outcome

Mrs N’s complaint is upheld and to put matters right Friends Life should pay her the unauthorised member payment tax charge and surcharge less the notional tax liability she would have paid had the full pension been taken as an uncrystallised funds pension lump sum (UFPLS). In addition it should pay Mrs N £1,000 for the significant distress and inconvenience caused by its error.

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

Complaint summary

Mrs N has complained that Friends Life undertook insufficient due diligence on the qualifying recognised overseas pension scheme (QROPS) into which she had requested a transfer. Had it acted appropriately it would not have accepted the transfer instruction.

Following the transfer Mrs N received the full value of her pension. At the time she was 53. As a result she is now liable to a 55% unauthorised member payment tax charge.

Mrs N has also said she has incurred costs whilst attempting to resolve the situation and Friends Life should pay these.