Sesame agreed that the advice to switch policies was not suitable in their circumstances and agreed to calculate any losses the couple suffered but didn’t take into account the guaranteed annuity rates.
Ombudsman Nina Walter agreed that the advice was not suitable but said she had to decide what was likely to happen in the following years to put them in the position they would have been in if the advice had not occurred.
Ms Walter found it unlikely that Mr S would have tried to access his pension early if the idea hadn’t been introduced by the adviser.
And even if he had, she believed once the guaranteed annuity rates had been properly explained to him, he would have waited another year until he turned 65 to take advantage of his valuable guarantees.
She also believed that Mr S would have taken his pension benefits at age 65 in the form of a 25 per cent tax-free lump sum and a single life annuity with an applied guaranteed annuity rate.
However, she didn’t believe that Sesame, through its pension advice, was responsible for the predicament Mr and Mrs S found themselves in when they came to repaying their mortgage.
Ms Walter said: “Based on the documents provided I haven’t seen anything to suggest that the pensions were presented as a repayment vehicle for the mortgage.
"And I don’t see how Mr and Mrs S’s pension would have realistically paid off their mortgage balance in any event.”
She added: “Mr and Mrs S say they were given the impression that there was still a pot of money to pay off their mortgage after Mr S accessed his benefits in 2012. However, I can’t see any evidence that this was the case.”
Therefore she ordered Sesame to put Mr S into the position he would have been in if Sesame hadn’t advised him to switch his pension in 2008.
It must also pay both Mr and Mrs S £250 for the inconvenience caused.
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