RegulationDec 7 2015

Fos sees surge in complaints about pension pay-out delays

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Fos sees surge in complaints about pension pay-out delays

Most of the complaints that have arisen from the pension freedoms are about delays in pension fund pay outs, according to new data from the Financial Ombudsman Service.

As at 13 November, the Fos had received just over 860 enquiries via telephone calls and emails, with the vast majority of these being resolved by talking to consumers and giving them information.

Of the 860 figure, 250 were new complaints involving the pension freedoms and the vast majority of these were about delays in pension fund pay outs.

The Fos explained that other reasons include administration, misinformation and the requirement for advice, as well as a tiny number on fees.

FTAdviser understands that a recent complaint that the Fos upheld was where a consumer complained that a provider charged him a fee to withdraw a lump sum from his pension prior to age 60.

According to the Fos, the consumer had not been told about this at the start so the regulator deemed this unfair and asked the provider to refund the fee.

Alongside this, other examples of scenarios where the Fos told FTAdviser it was seeing unhappy consumers were with providers not offering certain retirement options and are telling consumers they need regulated financial advice to transfer their occupation pension - which is under £10,000 - into a personal pension.

In November, the Fos upheld a case against St James’ Place Wealth Management and ordered the firm to pay a customer £1,000 to reflect the “distress and inconvenience” caused to his retirement plans.

The client, known as Mr S, complained when his deferred pensions, valued at more than £500,000, were transferred in 2012 his adviser did not discuss the implications of the lifetime allowance with him.

While mention of the lifetime allowance was included in a document, Mr S believed if the issue had been discussed he would have stopped his personal pension contributions and redirected them into alternative tax efficient investments, adding the tax charge he will most likely suffer on the personal pension contributions between 2012 and 2014 should be calculated and compensated for by SJP.

ruth.gillbe@ft.com