Abbey Life under fire over pension transfer

Abbey Life under fire over pension transfer

Abbey Life has been criticised by the Financial Ombudsman Service for delaying a pension transfer and then recalculating the transfer value to a lower amount.

Problems arose because the company maintained it could only carry out the pension transfer by posting a cheque, unless a charge was paid from the pension fund for an electronic transfer.

But despite telling the saver’s adviser – Claire Walsh of Brighton-based Aspect 8 – that it would not revalue the pension, Abbey Life did, and in the month since the original value was produced the transfer value had gone down.

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Ms Walsh, who took the case the the Financial Ombudsman Service on behalf of her client, said: “They told me they had all they needed for the transfer but in order to transfer the money they needed confirmation that around £25 could come from his pension to pay for the electronic transfer.

“The whole process takes such a long time and the client was really worried he would lose money.

“It just seems a weird way to operate, but that is their process.”

The client submitted the transfer application from Abbey Life to a self-invested personal pension with Liberty Sipp for his £310,000 pension in August 2016.

Liberty had asked for the transfer to be made by telegraphic transfer but Abbey Life said this wasn’t its preferred method of paying transfers.

Ms Walsh didn’t agree to a cheque transfer because she wanted to find out whether Liberty would charge more to cash a cheque than Abbey Life did for the electronic transfer.

By the time the transfer was recalculated, the pension had decreased in value by nearly £2,000.

In coming to his decision the adjudicator listened to the recording of the telephone conversation between Ms Walsh and Abbey Life.

He heard she was told the transfer value wouldn’t change as long as Abbey Life’s requirements were met.

The Fos adjudicator said: “In my view, Abbey Life had a duty of care to warn the adviser about the risk of a recalculation and I’m not satisfied it did that.

“I don’t think it was unreasonable for the client to expect the value to remain as it was on 12 August 2016 and I think if he’d been made aware otherwise he would have been prepared to allow the transfer to be made by cheque.

“I think it was clear from the conversation between Abbey Life and the adviser that the client was concerned about his investment losing value if he was out of the market and he would have accepted the proposal to transfer by cheque which meant his transfer value was unlikely to have changed.”