Royal London Group Personal Pension Plan · CAS-79505-D9P2

CAS-79505-D9P2

Ombudsman’s Determination Applicant Mr S

Scheme Royal London Group Personal Pension Plan (the Plan)

Respondents Royal London (RL)

Outcome

Complaint summary

Background information, including submissions from the parties

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The February 2019 statement also said, in relation to the pension contributions assumed to be paid in to the Plan:

“Your contributions and your employer’s contributions will increase each year in line with salary. We have assumed your salary will increase by 2.5% each year. Regular contributions will continue until the earlier of your chosen retirement date or your 75th birthday.”

In relation to the pension contributions assumed to be paid in to the Plan, the January 2021 statement said:

“No further contributions will be paid into your plan”.

In March 2021, Mr S contacted RL to ask if the January 2021 statement took into account the discontinuance of pension contributions. RL said that it did.

Mr S contacted RL again in September 2021, following receipt of a retirement options letter which illustrated values that did not correspond with the January 2021 statement. Mr S was under the impression that RL did not want to deal with his call as he was cut off twice.

When Mr S succeeded in making contact with RL, it told him that he was misinformed in March 2021 and that the assumption in the January 2021 statement did not mean no further pension contributions would be paid to the Plan; it meant no additional regular or ad-hoc pension contributions would be paid in addition to the existing regular pension contributions. Mr S complained that he had been misled.

RL responded to Mr S’ complaint in September 2021. It agreed that Mr S had received poor service and offered him £200 as a goodwill gesture. It also provided a corrected benefit statement (the September 2021 statement) in which the estimated value of the Plan’s investments at the NRD was £28,300 on the basis of an investment growth rate of 1.1% above inflation.

2 CAS-79505-D9P2 Mr S did not accept RL’s response, as he considered that £200 was insufficient in relation to the distress suffered because of the fall in the expected value of the Plan’s investments and the inconvenience of the telephone calls he was forced to make to establish the correct position. In Mr S’ opinion, an award of £1,500 would have been appropriate.

Adjudicator’s Opinion

RL accepted the Adjudicator’s Opinion without further comment.

Mr S did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr S provided his further comments which do not change the outcome. I note Mr S’ comments but I agree with the Adjudicator’s Opinion.

3 CAS-79505-D9P2 Mr S’ additional comments

When he contacted RL in March 2021, he had just been made redundant and was under considerable stress. His contact with RL was not because he suspected the January 2021 statement was incorrect, but to appraise his financial situation with a view to managing his redundancy.

Being under redundancy-related stress, he took the January 2021 statement at face value, having checked with RL that it was correct. It did not occur to him to compare the January 2021 statement with earlier statements.

He had asked for information to assist his decision as to how to apportion the finances available to him at that time. His wife’s 60th birthday was approaching and, following his redundancy, he paid to enrol in an accountancy course. In making his decisions, he should have been able to rely on the information RL provided.

His vocational experience was in catering and hospitality. He should not have been expected to have a thorough understanding of how pensions work.

He did not agree with the Adjudicator’s view that he was ready to mitigate against a reduction in the value of the plan. He received a lump sum redundancy settlement from his former employer, part of which he could have paid into his pension if he had been given correct information in March 2021. Instead, having been given incorrect information, he spent the money available elsewhere.

Ombudsman’s decision

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I partly uphold Mr S’ complaint.

Directions (if applicable)

Anthony Arter CBE

Deputy Pensions Ombudsman

2nd August 2024

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