The Pensions Ombudsman has partly upheld an investor’s complaint against Standard Life, but warned his savings may be at risk.
Ombudsman Tony King agreed with investor Gregory Stobie that Standard Life should reconsider transferring his savings out of the company’s self-invested personal pension scheme.
The Edinburgh-based company refused to transfer Mr Stobie’s savings to a one-member scheme which was registered at the 47-year-old’s address.
Mr Stobie’s pension scheme had been set up for his IT consultancy firm called Shredded Image.
But when it received the application in May 2013 Standard Life said there were “warning signs” that the scheme could be used for pension liberation.
Standard Life said it would not transfer the savings until it had been given the green light by the Pensions Regulator.
But Mr Stobie complained to the Pensions Ombudsman.
In his conclusion, Mr King said pension providers, trustees and managers are in an “unenviable position” having to judge whether a transfer application is legitimate or not.
He said: “Standard Life was right to identify that there were grounds for suspicion.
“The arrangements that Mr Stobie was making fitted perfectly the model of unorthodox arrangements that the Pensions Regulator was worried about.
“But I cannot see why the burden lay with Mr Stobie to prove that the transfer was an authorised payment and/or that he did have a statutory right.”
Mr King pointed to the fact that under the rules of the Sipp, Standard Life has discretion to allow a transfer, which the firm had not considered.
He told Standard Life to reconsider the transfer request and that “Mr Stobie intended to take an unorthodox step which was, at the least, high risk.
“At worst he was on the point of being financially disadvantaged. He may wish to consider taking professional advice from a recognised adviser properly authorised to deal with pension matters before he takes that step now.”
Andrew Rostron, director of Manchester-based Hartley Wadsworth & Partners, said: “Pension companies are very quick to say we won’t give advice and distance themselves when it suits them.
“But at the end of the day if the consumer wants to transfer their money and they haven’t had advice that is their problem, but they are daft not to get advice.”