Aviva Life and Pensions UK Ltd · DRN-6102432

The complaint Mr C is unhappy that Aviva Life and Pensions UK Ltd (“Aviva”) provided him with incorrect information about his pension transfer options when he enquired about accessing some of his available Tax-Free Cash (“TFC”). What happened Mr C had a pension with Aviva, which was valued at just over £1,305,000. In June 2024, he asked to withdraw £130,000 of his TFC allowance. It was explained this would involve crystallising £520,000 of his pension, of which he’d receive £130,000 as TFC, with £390,000 placed in a ‘drawdown pot’. The remaining balance of his pension would remain in an ‘accumulated’ pot. In July 2024 Mr C phoned Aviva to ask about transferring the ‘accumulated pot’, believing it contained uncrystallised funds, to a Self-Invested Personal Pension (“SIPP”) with Aviva. During that call, an Aviva agent ‘walked him through’ the online process to request such a transfer. Shortly after this, Mr C received confirmation that the transfer was in process. Just over two weeks later, Mr C received an email from Aviva informing him that the transfer had been cancelled. This was because the Aviva SIPP couldn’t accept crystallised funds, and the funds he was seeking to transfer into it were crystallised. Mr C was unhappy with this, and contacted Aviva, as he’d been specifically told in his previous exchanges with Aviva agents that the funds he was transferring into the SIPP were uncrystallised, and were therefore permitted. There followed a series of emails and phone calls in which Mr C sought an explanation why this had happened and request that Aviva proceed with the transfer that he’d been assured was possible at the outset. However, Aviva explained why this wasn’t possible – once Mr C has taken a portion of his TFC, it effectively crystallised the whole of his pension fund. His fund was divided into multiple segments, and a proportionate amount was taken from each of those segments when his TFC was taken, the effect of which was to make each segment part crystallised. But, Aviva agreed that Mr C had been given clearly incorrect information during his July 2024 call with them – their agent make a clear mistake telling him a part transfer to one of their SIPP’s was possible and assisting him with an online transfer application in that regard. They offered to pay him £300 compensation for the distress their actions had caused. They also agreed to pay him any investment loss caused by any delays they’d caused if he chose to subsequently transfer his remaining pension funds to another provider who were able to accept a combination of these types of funds. Unhappy with this, Mr C brought his complaint to us. He was unhappy with the compensation offered, as he felt Aviva hadn’t considered the loss in the value of his pension investments in the period this mistake had occurred. He believed that, had Aviva transferred the remainder of his funds (circa £780,000) to a SIPP as he’d requested, and been told was possible, his pension investments would have been sold down to cash shortly before their value reduced due to adverse financial markets performance. He believed this reduction amounted to about £40,000, and thought Aviva’s offer of compensation should have better reflected that drop. One of our Investigators agreed that Aviva’s actions had caused a delay in Mr C being able to transfer his pension. She calculated that their actions delayed Mr C’s ability to explore a

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transfer away by 26 days, and asked Aviva to undertake a loss calculation on that basis. She also felt their offer of £300 compensation was fair in the circumstances. Aviva accepted that outcome, but Mr C did not, as he remained unhappy with the loss calculation period that had been suggested. He asked for the case to be reassessed by an Ombudsman, and so his complaint was passed to me for that purpose. And having done so, I reached a slightly different conclusion to that of our Investigator, and so I set out my conclusions in a Provisional Decision (“PD”), inviting comments from both parties. What I’d said in my Provisional Decision It’s not in dispute Aviva provided Mr C with incorrect information when he called them to request a transfer of part of his pension, shortly after having accessed some of his TFC. But, because there is disagreement about when Mr C should reasonably have been aware that he couldn’t transfer his ‘uncrystallised’ funds to the Aviva SIPP, and accordingly what the ‘delay period’ should be for redress purposes, I think it’s necessary for me to look in more detail at what was said in the relevant phone calls – none of which were available when our Investigator issued her View. 20 June 2024 Mr C called to discuss his options for taking some TFC, as he wanted some funds to clear his offset mortgage. He said that as about 25% of his current funds were in cash-related or low growth investments, it made sense to take TFC out of those funds. He also explained his likely plans, at that time, were for his (post-TFC) funds to remain in a drawdown account, with him drawing the growth as income, and leaving the remainder of his funds invested. This was a detailed call, lasting nearly 40 minutes. In terms of this complaint, Aviva’s agent explained about crystallisation, the effect of taking TFC, and the difference between a partial and full crystallisation event. In particular, he said: “once you’ve crystallised the pension, if you do take any TFC from it, you are then a little more limited in terms of where the remaining drawdown funds can be transferred to – some companies don’t accept crystallised funds as transfers – so food for thought – if you do want to do a regular one, you would need to move it into either a SIPP – which we can offer you” And, after explaining that if Mr C took only part of his available TFC, he’d be ‘partially crystallising’, but if he took all his available TFC he’d be fully crystallising. He also explained: “sometimes you can do a partial transfer, you do have numerous segments within this pension so it’s possible if you crystallise some of it it’s possible you can still transfer the uncrystallised portion elsewhere but the money in drawdown would be crystallised and therefore a bit more limited in terms of where you can transfer it too” Mr C advised he’d like to access TFC of £130k. The agent explained Mr C would be crystallising £520k to allow this to happen, with £390k being placed into a drawdown pot, with approximately £780k left being held in an ‘accumulation’ pot (from which further TFC could be accessed, up to the £268,275 limit). Mr C asked for a quote on this basis – and ultimately received his £130k TFC some days later. The agent then explained once Mr C had crystallised or partially crystallised the policy, it wouldn’t be possible to move the funds into their SIPP, which was available for uncrystallised policies only. The agent then explained in general terms about Aviva’s SIPP, saying it was possible to move funds into a SIPP – that Mr C wouldn’t need to take money from it, but once TFC had been taken, the remainder could be moved into drawdown within the SIPP. This was a self-managed online product. The charging structure of the SIPP was also clarified. Having listened to this call, it’s clear the agent provided a considerable amount of accurate information. But I can also understand if there was some confusion on Mr C’s part about

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what he was being told. The agent said Mr C could crystallise part of his policy (the £130k TFC and £390k in drawdown) and transfer the rest “elsewhere”. Whilst correct, the agent did imply Mr C would retain an “uncrystallised portion”. And the agent later explained, without reference to Mr C’s circumstances, that it wouldn’t be possible to move funds to an Aviva SIPP once a partial crystallisation event had occurred. Again, this is correct. But the agent was already aware of Mr C’s main intention at that time – to access some of his TFC, which would require a part crystallisation. It was also clear he wanted to understand more about the SIPP transfer opportunities, and the reduced fees that accompany Aviva’s SIPP. So I think it’s reasonable to have expected the agent to be clearer in what he told Mr C towards the end of this conversation – that Mr C’s stated intentions would prevent him from taking advantage of the opportunity to transfer to Aviva’s SIPP. That option would only have been possible if a full SIPP transfer took place before taking the TFC. I also think the agent missed a key apparent misunderstanding on Mr C’s part. He clearly thought he could take the TFC from existing cash-based or low-risk investments. However, it transpires this was never possible – Aviva subsequently explained that any crystallisation event would effectively take a pro-rata portion of each investment ‘segment’, which had the effect of ‘crystallising’ Mr C’s entire policy. I think it would have been reasonable for the agent to have corrected Mr C’s misunderstanding here. 11 July 2024 Having listened to this call, it’s clear Mr C approached Aviva believing he could now move the remaining £780k-odd of his policy to a new Aviva SIPP. This wasn’t an option that was introduced to him on this call – he was calling based on what he understood following the above June call, to transfer the ‘uncrystallised’ sum to an Aviva SIPP. And, as Aviva have accepted, their call handler mistakenly guided Mr C through that process on this call. That was a mistake they have accepted, and there is nothing more I need to say about that here. Instead, I do need to consider what happened next, once Aviva notified Mr C that it had cancelled his ‘SIPP transfer’ request. 26 July 2024 Mr C was sent an email on 26 July 2024 to say his transfer had been cancelled. It explained Aviva can’t accept crystallised funds into their SIPP. It further explained that once benefits are taken from their funds, they become crystallised and can’t be moved to their SIPP. But the email also went on to say that: “if you have uncrystallised funds, or a partly crystallised fund, it may be possible to transfer these to Aviva”. This is precisely what Mr C was told – that he had uncrystallised funds (the £780k-odd) which could be transferred, and so there appears to be a clear inconsistency here. At the very least, the email contained a lack of clarity. 5 August 2024 Mr C called Aviva, to express his anger at what had happened. He explained why he felt Aviva’s mistake had caused his funds value to drop by about £40,000. He didn’t understand why his request was cancelled, or why he’d received notification the transfer was being processed, or why no-one contacted him more proactively to alert him there was a problem. The agent explained that once any policy was in drawdown (as here), it couldn’t be partially transferred. She explained that Mr C’s policy was divided into multiple ‘segments’, and that each segment had a part that became crystallised after Mr C took his TFC. So, there was effectively no split between crystallised and uncrystallised funds. Mr C explained this was precisely the opposite of what he’d been told on the 11 July call. Nevertheless, the agent said this is why the transfer was cancelled, but said they’ll look into the matter further.

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Mr C also said he’d asked, prior to the General Election (which, as this was on 4 July 2024, I presume must mean in the initial ‘TFC’ call on 20 June 2024) if he could transfer his whole pension into a SIPP but was told this would take too long and wouldn’t complete prior to the Election, and so wouldn’t allow him receive his TFC before the Election either. He implied this is why he elected to take the TFC in the way he did. Having listened to that 20 June call, I’m satisfied this wasn’t mentioned by Mr C as he’s suggested. Yes, the SIPP was mentioned, as was the Election in general terms, but there was no discussion (or mention) of timescales, or any comment that accessing TFC wasn’t possible before the Election date. I’ll return to the relevance of this later in this Decision. 6 August 2024 Here, the agent confirmed Mr C’s complaint about the cancelled transfer was being “looked into”. Following a further exchange about this, Mr C again asked Aviva to execute the transfer (the £780k to an Aviva SIPP) straight away. The agent tried to explain again this wasn’t possible, as the policy was now in drawdown. Mr C disagreed with the agent, as he hadn’t asked to take any funds (other than the TFC) from the policy. It seems clear Mr C may still have been unclear about the status of his pension. However, having listened to the above calls, I’m satisfied it was made clear, and repeatedly so, that the process of taking £130k TFC would mean £390k would be placed ‘in drawdown’. I think it was made sufficiently clear that, after accessing the TFC, Mr C would be left with £390k in a drawdown pot, and £780k in an accumulation pot. The agent explained again that as part of the policy (TFC) had been taken, and put into drawdown, the segments from which that sum was taken was “reflective of the policy as a whole”, so “part of each has been crystallised”. He said crystallised and drawdown “class as the same thing”. As part has been crystallised, that meant part can’t be transferred. Mr C asked if it was possible to move “the whole lot” out of Aviva to another provider. The agent agreed – as long as the receiving scheme would accept crystallised funds. Mr C noted he was aware of several that do. Mr C again expresses his frustration, but notes “it is as it is”. Mr C then asked what length of time he is “exposed in this situation” and what is the estimated time to “remedy this”. The handler simply responded by saying she’ll keep him updated with progress with his request for call recordings to be made available to him. Subsequent email exchanges Various emails from Aviva followed, both from their complaints department, and separately from their Investment Support Team. Their ‘complaints’ emails essentially focussed on the progress of Mr C’s complaint, the delays in addressing it, and provided Mr C with a letter detailing his referral rights to this Service given those delays. However, the support team emailed Mr C on 11 October 2024, regarding a further online partial transfer request Mr C made that was also cancelled, stating as follows: “Following your request to transfer from [your Aviva policy], I have telephoned them to ask why it has not been completed yet. Unfortunately, I do sincerely apologise that they advised me that they abandoned your request and have not sent us any communication regarding this…I have submitted a new request and asked them to escalate it for you” So, when do I think it’s reasonable for Mr C to have known that a partial transfer to Aviva’s SIPP was not possible I think it’s clear from the above that Mr C’s journey with Aviva was subject to many instances of poor communication on their part, and confusing and inconsistent messaging. I’ve already commented on the 20 June and 11 July calls, and so there’s no need to repeat those comments here. I also think the subsequent 26 July 2024 email was inconsistent and imprecise. However, I think the calls on 5 and 6 August 2024, collectively, provided sufficient

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clarity the transfer Mr C was mistakenly told he could made, and wanted to make, was not (or ever was) possible. Mr C had been told on two calls/occasions, and in detail, why a partial transfer of the remainder of his funds (the £780k) couldn’t be made to an Aviva SIPP. I appreciate that Mr C appears to have left the 5 and 6 August calls still thinking either (a) he could still successfully request a partial transfer to their SIPP (otherwise why would he have made another attempt in October), or (b) that Aviva continuing to ‘look into matters’ could have potentially meant they would allow him to complete his transfer. I agree those August calls say Aviva were continuing to ‘look into matters’, but I’m satisfied those enquiries were focussed on finding out what had happened, and why, rather than finding a solution that would allow Mr C to complete a transfer Aviva’s policies specifically prevented. I don’t think there was anything in those calls that alluded to Aviva trying to find a way to ‘circumvent’ their own policies, or find a way to make an exception for Mr C. So, I think Mr C should have realised, by 6 August 2024, that it wasn’t possible to transfer the remainder of his funds (the £780k) to an Aviva SIPP. From this point on, I can’t fairly conclude any further delay in him exploring a transfer away from Aviva was their fault. I do appreciate Aviva’s 11 October 2024 email could have been confusing – suggesting someone within Aviva was making enquiries to try and understand why Mr C’s further transfer request was refused, long after it had been separately explained/confirmed why such a transfer was never possible. But I don’t think this email should extend the period in which Mr C was justified in thinking an Aviva SIPP transfer (of the £780k) was possible, for the reasons I’ve explained above. I think it was already sufficiently clear that a ‘partial’ Aviva SIPP transfer wasn’t possible before Mr C made his further request. And I similarly don’t think the receipt of Aviva’s Final Response should act as the date when Mr C finally became aware such a transfer wasn’t possible. This merely re-stated the above sequence of events, as opposed to informing Mr C of something he wasn’t already reasonably aware of. So, what should have happened Aviva have said their first mistake, insofar as this complaint is concerned, was the 11 July call. I disagree. For the reasons I’ve explained above, I think their mistakes began on the earlier 20 June 2024 call. Had their call handler been clearer, then I think it’s more likely than not that the 11 July call may have never taken place. Put another way, if the call handler on 20 June 2024 been clearer that a transfer to an Aviva SIPP could only take place before any funds were taken from Mr C’s pension, then Mr C would have been able to make an informed decision at this time whether to either effect a full Aviva SIPP transfer (and then take his TFC via a crystallising event within the SIPP), or take the quick TFC in the way he did, and then explore transfer options of the remaining ‘full’ amount of his pension to another provider. Put simply, I think Mr C should have been correctly advised what his transfer options were on 20 June 2024 but instead had to wait until 6 August 2024 (47 days later) before he was adequately made aware of these. He had to wait 47 days to be correctly informed about the options as described, and that is the delay period I’ll be using for redress purposes. My suggested redress for putting things right I think it’s clear, having listened to his calls, Mr C was initially driven by a wish to access TFC. This is mentioned in an initial enquiry call made on 19 February 2024, and again in detail on the 20 June 2024 call. He was consistent in explaining a wish to access the funds to repay his remaining offset mortgage. I also return to what Mr C said in his 5 August 2024 call – he recalled being previously told that accessing TFC after a SIPP transfer had completed would have taken too long, which is why he chose the immediate part-crystallisation option to get the TFC quicker. Whilst I’ve

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already said there was no mention in that June call about discounting an Aviva SIPP transfer due to timeliness issues, Mr C’s (seemingly mistaken) recollection does support a conclusion that accessing his TFC in a timely manner was important to him. But I also note Mr C seemed happy with the current funds his pension was invested in. He asked about whether they would be available when in drawdown or within Aviva’s SIPP. He also said he had no reason to want to move away from Aviva. But, for redress purposes, I need to decide what I think, had Mr C been given the correct information on the 20 June 2024 call, he would have likely done – a longer SIPP process to get the TFC (and stay with Aviva), or the quicker immediate ‘drawdown’ route (and transfer away from Aviva) which he inadvertently took. And having thought very carefully about everything I’ve said above, I’m more persuaded he would have likely chosen to take his TFC in the way that he did. I think the extra time it would have taken to transfer to a SIPP - selling down his investments in his pension, transferring across, reinvesting in the same funds, and then making a drawdown application (all self-managed, online), would have likely been less appealing. I think Mr C’s wish to access the TFC in a timely manner would most likely have been prioritised, whilst at the same time he’d have been able to start exploring his ‘transfer away’ options. So, from a redress perspective, Mr C would have been able to start exploring his ‘transfer away’ options from 20 June 2024 onwards. The unclear information Aviva provided on that 20 June call delayed Mr C’s transfer considerations by 47 days - and it’s the potential loss in value of his investments caused by this delay that needs to be considered, and rectified if appropriate, by Aviva. Mr C believes the loss calculation should be based on how much his pension investments fell in value during that initial delay period, essentially to better reflect the (he says) £40,000 loss in value that Mr C says was caused by his funds not being sold down to cash immediately after he’d started the SIPP application. Whilst I understand why Mr C may want to use this as a starting point, I don’t think this is the correct method to use. Mr C waited until 5 February 2025 before finally transferring away from Aviva which, even by his own representations, is nearly four months after he thinks he became aware the Aviva SIPP application was not possible (when he received Aviva’s final response letter). He’s explained this extended period was his own choice, whilst he made careful enquiries, as he wouldn’t act “in haste” as he put it. This is understandable, given the size of the fund (£1.1m- odd) he was transferring. However, it also confirms that Mr C didn’t react immediately to the market movements that occurred at around the time of his 11 July call. Nor did he react immediately after receiving Aviva’s final response letter. He waited and took his time to explore his transfer options. Accordingly, I can’t fairly conclude he would have acted in any materially different way had he been given the correct information on the 20 June call. I think it’s highly likely he’d have similarly carefully considered his options after this time too. For this reason, a more appropriate loss comparison would be between when the funds were eventually transferred, and a date 47 days prior to that. Mr C was delayed by 47 days, and Aviva will need to ascertain whether, had he transferred his funds 47 days earlier than he did (at whatever value they were at that time), would the value today (or when calculated) be greater than the value of his current plan. If it would have been, that is a loss that Aviva will need to redress. I then provided an outline of how that should be calculated. Distress and Inconvenience (“D&I”) Aviva offered to pay Mr C £300 compensation to apologise for the D&I their actions and mistakes caused him. I’ve thought carefully whether this sum fairly reflects the inconvenience Mr C experienced as a result of Aviva’s mistakes.

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I’ve paid careful attention to the guidelines we publish on our website regarding the levels of compensation we think a business should pay. Awards for D&I are separate to redress recommendations we make and are designed to apply a value to the practical and emotional impact of a business’ mistake. Here, it’s clear that Mr C experienced inconvenience. He had to phone Aviva on a number of occasions. He received mixed messages from Aviva at times which was clearly confusing, and frustrating. But taking all of this into account, I’m satisfied the compensation Aviva have offered to Mr C is reasonable in the circumstances here, and broadly in line with our published guidelines, so I won’t be asking them to increase it. Responses to my Provisional Decision Mr C accepted the outcome in my PD, however Aviva have questioned the length of the loss period I’d set out. Briefly, they’ve said as follows: - Their agent followed the correct ‘script’ in the 20 June 2024 call, by saying: o “Once funds are crystallised, they cannot be transferred to the Aviva SIPP. Other providers may accept crystallised funds, customer would need to speak to the other provider to see if they accept”. - And whilst accepting that agent gave incorrect information about partial transfers of uncrystallised funds before saying this, the above script ‘corrected’ this mistake. And that the documents subsequently provided further emphasised that Aviva were unable to do a partial transfer once a crystallisation event had occurred. - Aviva disagreed the agent should have been clearer at the end of the call, saying: o The agent had already noted/advised it wasn’t possible to transfer to an Aviva SIPP once a crystallisation event had occurred, and it Mr C who prompted the conversation about the SIPP possibilities, which the agent correctly advised he’d have to undertake his own research into. o And this call was ended abruptly because Mr C had to take another call. - When Mr C signed his TFC request form, on 2 July 2024, he was agreeing he’d received, read and accepted the terms and conditions (T&C) relating to income drawdown, and he’d read their ‘Income Drawdown Option’ leaflet. Aviva highlighted the following text within the T&Cs (and similarly within the leaflet), which they said provided a further instance of them having indicated that once TFC had been taken, Mr C would only have been able to transfer the entirety of the remainder of his plan to another one: o “You can still transfer your plan to another pension plan or provider. The transfer will apply to your whole plan (Both income drawdown funds and any accumulation funds you may have). Some providers may not accept this type of transfer” - But Aviva agreed there is an argument that Mr C was confused, and they’d already agreed to undertake a loss calculation because of that. And they suggested the following represents a fairer redress loss calculation period: o The period should only start when the TFC withdrawal process was completed – docs signed on 2 July 2024 and only completed upon payout on 10 July 2024. o Mr C’s SIPP was then set up the following day, when the aborted transfer request call was made. o So, the loss period should be between 11 July and 6 August 2024 (agreeing with my ‘end’ date), which when adding an extra day where Aviva has identified a delay in the transfer process, results in a period of 19 working days.

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What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I’d like to thank Aviva for providing a detailed response to my PD. I agree with elements of what they’ve said, which itself echoed much of what I’d set out and concluded in my PD. But I’m not persuaded by their arguments that the loss calculation period should only start following the 11 July 2024 phone call. To agree with that outcome would essentially suggest that the incorrect and/or confusing or contradictory information provided prior to that call, which Aviva accept did occur, should somehow be ignored. Aviva have accepted some of the agent’s comments in the 20 June 2024 call were conflicting and would have been capable of causing Mr C confusion. I don’t need to repeat these here. So, Mr C started the process of accessing his funds on that date by being provided with conflicting information. I disagree with Aviva’s suggestion that their agent ‘corrected’ the mistaken information on that call. There was no ‘correction’ as such, as there was no acknowledgement in that call that a mistake had been made that needed correcting. Mr C was simply provided with different information at different times on that call. The call ended with insufficient clarity having been provided by Aviva. I acknowledge it was Mr C who raised the subject of a SIPP transfer on that call – a call which was fundamentally about the process of Mr C taking some TFC. But I don’t think that means the agent shouldn’t have provided full clarity about the SIPP options that were available. Mr C raised the question, and I think was entitled to expect a clear response in respect of the points that he’d raised. And I don’t think the fact the call ended when Mr C had to attend to work obligations is of any relevance here. The call lasted nearly 40 minutes in total, providing sufficient opportunity to have provided accurate (or clearly corrected) information in that time. I do understand Aviva’s point when they say the documents that subsequently accompanied Mr C’s TFC request form did include accurate information. I agree they did. Mr C signed to access his TFC, and by doing so signed to agree he’d read and understood everything contained within those attached documents. In the usual course of events, significant weight would be attached to Mr C having signed to acknowledge all this information. However, after having thought carefully about this point, I don’t think it would be reasonable here to conclude that these forms, and the information contained therein, effectively acted as a mechanism to correct the mistakes that were made in the above-mentioned call. Yes, they had been provided for Mr C to read and understand (albeit in relation to an application to access his TFC only at that point), but the conflicting information from the earlier call still hadn’t been explained and corrected. The subsequent phone call on 11 July 2024 essentially provided the opportunity to correct Mr C’s understanding, but of course that opportunity was very much missed. Fundamentally, I think Mr C started his ‘accessing his benefits’ journey on the 20 June 2024 call. That journey continued, punctuated by different information being provided (some correct, some not), until the point in time (6 August 2024) when I think it was made sufficiently clear what the correct options available to Mr C were. I don’t think it would be reasonable to try and artificially break down that ‘journey’ into isolated parts – an initial period of conflicting information, followed by a short period where correct documentation was provided, followed again by a period of clearly incorrect information. I think it is fairer to assess it as one whole journey, and it wasn’t until the exchanges on 6 August 2024 that the inconsistencies shown in that journey were fully explained. So, I’m satisfied, on balance, the redress outcome I’d set out in my PD represents the fairest way to settle Mr C’s complaint, and I won’t be departing from that suggested outcome here.

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Putting things right So, to put things right for Mr C, I require Aviva to do the following: • Aviva will need to calculate what the value of Mr C’s policy was 47 days before the date it was sold down to cash. • It should then contact Mr C’s new pension provider to ascertain what the value of Mr C’s pension would now be worth if that sum had been transferred to them 47 days prior to the date it was transferred. • If Mr C’s current pension value is greater than that sum, then Mr C hasn’t experienced any loss. But, if that calculation shows Mr C’s pension would now be worth more, then he’s experienced an investment loss, which Aviva will need to redress. • If there is a loss, Aviva should pay that sum into Mr C's pension plan to increase its value by that amount, and any interest. The amount paid should allow for the effect of charges and any available tax relief. Compensation should not be paid into the pension plan if it conflicts with any existing protection or allowance. • If Aviva is unable to pay the compensation into Mr C's pension plan, it should pay that amount directly to him. But had it been possible to pay into the plan, it would have provided a taxable income. Therefore, the compensation should be reduced to notionally allow for any income tax that would otherwise have been paid. This is an adjustment to ensure the compensation is a fair amount - it isn’t a payment of tax to HMRC, so Mr C won’t be able to reclaim any of the reduction after compensation is paid. • The notional allowance should be calculated using Mr C's actual or expected marginal rate of tax at his selected retirement age. • It’s reasonable to assume, given Mr C’s overall pension arrangements, he is likely to be a higher rate taxpayer at the selected retirement age, so the reduction would equal 40%. However, if Mr C would have been able to take a tax-free lump sum, the reduction should be applied to 75% of the compensation, resulting in an overall reduction of 30%. • Aviva should also pay Mr C £300 compensation for the distress their actions have caused him, unless that sum has already been paid. • Aviva will need to ensure the above redress enquiries are completed within twelve weeks of being advised of Mr C’s acceptance of this Final Decision. If they haven’t been completed by that date, and the loss calculation needs to be paid to Mr C as a taxed lump sum (because it can’t be applied to his pension), interest will be due and payable to Mr C, calculated at a rate of 8% simple, from that ’12 week’ date until the date of eventual payment to him. My final decision I uphold Mr C’s complaint against Aviva Life & Pensions UK Ltd and require them to pay him redress as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 20 February 2026. Mark Evans Ombudsman

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