Aviva Life & Pensions UK Limited · DRN-6227282

The complaint Mr C is unhappy with the performance of his pension with Aviva Life & Pensions UK Limited (Aviva). What happened I issued a provisional decision on 5 March 2026. In response, as well as making detailed comments which I’ve summarised below, Mr C suggested some amendments or additions to what I’d said, some of which I’ve adopted. The first few paragraphs I’ve set out below don’t repeat exactly what I said in my provisional decision about what had happened. But the rest, including my provisional conclusions, is the same. Mr C is a member of a Group Personal Pension Plan (GPPP) set up by his then employer on 1 April 2010 with Friends Life and Pensions Limited (Friends Life), which later became part of Aviva. For ease of reading, I’ve just referred to Aviva, references to which should include Friends Life where the context so requires. Mr C’s selected retirement date (SRD) was his 60th birthday in July 2018, although he later deferred his retirement. He opted for a Defensive Strategy Fund with a three year Lifestyle programme. Contributions (a mix of employee and employer) would be invested in that Fund (which was in risk band Low+) and would automatically switch gradually into four pre-selected funds over the three years prior to SRD. One of those funds was in risk band Medium -, two were Low+, and the fourth was Low. A circular guide Mr C received in December 2013 confirmed that the risk ratings of all those funds were unchanged. Mr C’s annual statement dated 31 March 2015 showed that all the contributions were invested in the Defensive Strategy Fund. But the Lifestyle programme meant that Mr C’s funds would start to be moved into the four pre-selected funds from July 2015, three years before his original SRD in July 2018. Mr C contacted Aviva in 2017 about changes to his investment funds. Several emails were exchanged. Aviva explained, in its email of 28 February 2017, that it was due to the automatic monthly rebalancing of his fund as decided by the Lifestyle programme which would end in July 2018. Aviva also explained how the funds were moved. In 2018, Mr C deferred his retirement date by two years. That meant the Lifestyle programme was adjusted to match his new SRD. Mr C got in touch with Aviva again in March 2020. He was concerned that the value of his fund had fallen when he’d thought he was in low risk funds. Aviva sent him a link to its funds library where he could access fund fact sheets. In an email on 5 May 2020 Aviva said his current fund value was £120,370.70. He was invested in a three year investment programme. It had started in January 2018 and would end in July 2020. It automatically moved him from higher risk to lower risk funds as he got closer to retirement to protect his investments. Details of how the funds were moved were given. Mr C asked how he could retain the value quoted as a minimum – he didn’t want any risk. Aviva said all investments carried risk. Aviva set out the funds in which Mr C was currently invested and provided a list of all the available funds with fund fact sheets. Aviva also referred Mr C to its fund centre.

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In July 2020 Mr C took his tax- free cash (£31,517.02). The residual fund was placed in an income drawdown arrangement. Aviva wrote to Mr C on 1 September 2021, saying it was closing the Defensive Strategy three year switching investment solution. The employer had informed Aviva that they wanted it to be removed from the active scheme. The letter went on to say that, as Mr C was past his SRD, the closure wouldn’t necessarily impact him. He’d still remain in his existing investment funds and that, as things stood, he was currently invested in the four funds set out. He also wouldn’t be affected by the new default investment solution, details of which were set out. In October 2022 Mr C gave instructions for all new contributions to be invested in the Aviva BlackRock Sterling Liquidity Fund which had a risk rating of 1. In April 2025 Mr C complained to Aviva. He said the funds he’d been invested in as part of the Lifestyle programme were high risk, when he’d stated from the outset he wanted low risk funds. Aviva issued a final response letter on 8 May 2025, not upholding the complaint. Aviva’s main points were: • Mr C’s pension fund was invested in accordance with default fund choices made by his employer when the policy was set up. Information about that, and any Lifestyle investments, was included in the policy booklet and documents issued when the policy began. Fund switches could be made at any time, without charge. • Aviva wasn’t responsible for managing Mr C’s plan. FCA (Financial Conduct Authority) regulations prevented Aviva from making investment decisions on behalf of customers or warning customers when their plan value was decreasing. • Returns weren’t guaranteed and all funds, even low risk, weren’t without any risk. So there was always the potential for the value to decrease, as well as increase. • Pensions can be complex but annual statements had been provided as a reminder to review funds regularly. Fund suitability can change over time. A regulated financial adviser can provide support for retirement planning and investment decisions. • Fund performance is outside of Aviva’s control and periods of volatility are to be expected. Mr C didn’t think Aviva’s response dealt with all the issues. There were further exchanges but Mr C remained dissatisfied and referred his complaint to this service. In summary he said, when his pension was set up, he specified low risk funds. The Defensive Strategy Fund originally had a low risk rating and was later risk rated 3 and that hadn’t changed. Aside from the BlackRock Sterling Liquidity Fund, which has a risk rating of 1, he’d been moved to funds which had increased in risk to level 5. He was unhappy he wasn’t told the risk ratings had increased. Aviva had said it didn’t notify members of risk rating changes except if they changed by 2 or more levels in one year. Here, as the increases were over time, Mr C wasn’t notified. The names of two of the funds included wording indicating they were longer term, low risk investments. The annual statements he received over the years didn’t say the risk ratings of any of the funds had changed. Aviva recommends using its fund centre (which didn’t exist in 2010) and fund fact sheets and says funds can be switched at any time. But, as Aviva didn’t

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say the risks had increased, he was unaware he needed to switch as he thought the funds were low risk anyway. In October 2022 he attempted to minimise risk by instructing that all new contributions be invested in the BlackRock Sterling Liquidity Fund. His March 2025 statement shows his pension is worth less than he’s invested. One of our investigators looked into Mr C’s complaint but she didn’t uphold it. Amongst other things, she said Aviva had administered the policy in line with its terms and conditions and the instructions given by the employer. Annual statements had been sent to Mr C and he could’ve altered his investments. The Lifestyle programme had been decided by the employer and Mr C could’ve opted out of it at any time. Recent market conditions had been volatile and it wasn’t up to Aviva to monitor fund risk ratings on Mr C’s behalf. Mr C didn’t agree and commented in detail on the investigator’s view. She made some more enquiries of Aviva who provided further information, as did Mr C. The investigator reviewed everything but she didn’t change her view. Mr C remained unhappy. The investigator put a number of queries to Aviva and shared what Aviva had said with Mr C. In response, Mr C’s main points were: • Aviva and his employer should’ve reconsidered the Lifestyle programme. The reason for switching to the four named funds as retirement approached was that they were the lowest risk, as the 2013 brochure demonstrated. But, when his fund was moved, three of the funds were by then high risk. • Aviva says its policy not to inform customers if the risk rating increased by one level each year complies with FCA guidelines – Aviva should specify the specific FCA guidelines and which Mr C had spent some time, unsuccessfully, trying to locate. • By the time his SRD was approaching, the core funds were out of date and were no longer the lowest risk. Yet Aviva had acknowledged in its email of 5 May 2020 that it had to transfer funds to the lowest risk funds. So Aviva should’ve moved all his investments into the level 1 lowest risk fund – the BlackRock Sterling Liquidity Fund. • Aviva caused his losses by applying an out of date process and didn’t reconsider if the BlackRock Sterling Liquidity Fund was his best option. • Mr C referred to the emails he’d sent in 2017 to Aviva and his employer querying why his pension fund was going down. Aviva had provided a table setting out how the funds were moved in the years before retirement. But Aviva had now accepted that he may not have been aware of the changes to the risk ratings of the funds. And Aviva had said he’d be automatically moved from higher risk to lower risk funds as he got closer to retirement – he’d taken comfort from that. • He raised three queries. I’ve mentioned the first, about the FCA guidelines. Secondly, he asked who the fund managers were. Thirdly, he queried whether Aviva had ever informed the employer of any changes in risk ratings. By 2017 the Defensive Strategy Fund had a risk rating of 3. The Sterling Liquidity Fund had a risk rating of 1. Yet his funds were moved from the Defensive Strategy Fund into other funds which had a higher risk rating of 4, which then increased to 5. The investigator considered Mr C’s further comments but didn’t feel she could add to what she’d already said. She hadn’t seen anything to suggest that Aviva hadn’t followed the correct Lifestyle investment strategy. The fund managers were shown on the fund fact sheets which had been supplied. She assumed Aviva would’ve notified Mr C’s employer about changes to fund risk ratings if there was a change of two or more.

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Mr C asked for an ombudsman’s decision. He’d also been in contact with the FCA about the guidelines Aviva had mentioned. He forwarded an acknowledgment from the FCA which referred to the FCA’s High Level Principles and the Consumer Duty. The FCA has more recently contacted him to say it had been unable to locate any guidance it had provided about when consumers should and shouldn’t be told about changes to risk profiles. The FCA suggested that Mr C ask Aviva for the specific FCA guidance. Mr C asked us to request that from Aviva, which the investigator did. In response, Aviva said there was no specific rule which requires insurers or investment firms to notify a customer when an internal risk rating increases. In the absence of a specific rule, Aviva’s internal approach (where notification is not issued for a one-step change) didn’t conflict with FCA regulations. But Aviva had to comply with other provisions, details of which it set out. Amongst other things, Aviva referred to obligations about suitability. I thought that might be confusing, given that Aviva, as the administrator of Mr C’s plan, didn’t provide advice. Aviva confirmed that and explained why it had referred to suitability. I’ve asked the investigator to share Aviva’s responses with Mr C. What I’ve provisionally 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. Having done so, I agree with the investigator’s views and for broadly the same reasons. I do sympathise with Mr C – he’s understandably very disappointed with how his fund has performed. Because of the fall in value, he was unable to retire in 2018 and had to carry on working until 2025, despite a period of serious ill-health in 2024. As he’s now retired due to ill-health, there was no time for his fund to recover and so it’s considerably less than he was anticipating. I’ve read and considered everything Mr C (and Aviva) has said. But my role isn’t to answer (or get Aviva to answer) each and every point that Mr C has raised. Instead, I’ve concentrated on what I see as the key issues and on which my decision is based. I’m also only considering Aviva’s part in the matter. Mr C has mentioned widening his complaint to include the employer, but we don’t have any jurisdiction over the employer. Mr C’s central position is that his pension was set up on the basis that he’d be invested in the lowest risk rated funds available and he’s always believed he was invested in such funds. I don’t think he’s unhappy with how his pension has been administered before the Lifestyle programme kicked in and changes to his investments were made. Mr C says he trusted Aviva that his pension would be protected against any loss of capital value because, under the Lifestyle programme and as confirmed by Aviva’s email of 5 May 2020, Aviva was to automatically transfer the pension funds to lower risk funds. It seems Mr C’s expectation was that the actual funds to which the switches would be made would be lower risk rated than his current fund as at the date of the switches. So, as the Defensive Strategy Fund had a risk rating of 3, his funds could only be switched to funds which had a lower risk rating – the Sterling Liquidity Fund which was risk rated 1. So he was understandably unhappy when he found out in 2020 that three of the funds to which the switches would be made had risk ratings of 5. But I don’t think that’s quite how things worked. Although the Lifestyle programme intended that a more cautious investment approach would prevail leading up to retirement, there was no guarantee that the funds actually selected would be lower risk and/or that fund values couldn’t fall. As has been explained, the switches were to funds that had been pre-selected in connection with the Lifestyle programme chosen by the employer as part of a default

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investment strategy when the plan was set up. It would work in the same way for all members who’d selected that option, rather than being an individually tailored programme. The Lifestyle programme was a mechanism aimed at reducing risk. It wasn’t based on actually choosing lower risk funds and it didn’t take into account the actual risk ratings of the particular funds. Rather the switches were to investments which would generally be regarded as lower risk and/or less volatile. The strategy increased the amount invested in deposits, bonds and gilts, which had historically been regarded as low risk investments. Unfortunately, largely unprecedented market conditions over recent years have been such that gilts have been volatile and some unexpectedly large losses have been suffered. In fact, it seems that difficult market conditions may have led the employer to look into the default investment programme and make changes as notified to members in 2021. But those changes didn’t affect Mr C as by then he’d completed the Lifestyle programme which had been in place since his plan was set up. The Lifestyle programme is designed to reduce exposure to investment risk as retirement approaches but there’s no guarantee that it will benefit the retirement pot when the member comes to retire. Aviva is the administrator of Mr C’s plan. Aviva has to administer the plan in accordance with the investment instructions given – which might come from the employer or the member. Here the instruction, from the employer, was that investments would be switched as retirement approached. Aviva followed that instruction. Aviva wasn’t responsible for Mr C’s choice to enter into that investment strategy (or not opt out of it). Nor was Aviva responsible for the employer’s decision to select that Lifestyle programme and/or not to review it earlier. Aviva also made it clear that Mr C, if he wished, could change his investments and/or opt out of the Lifestyle programme. But Mr C’s position is that he wasn’t made aware that he might need to do so – he says Aviva should’ve informed him about risk rating increases. The higher risk ratings reflect a change at the end of 2018/beginning of 2019 to the range of scores Aviva used to identify the risk rating of the funds it offered. Instead of scoring a fund on a scale of 1 to 5, Aviva extended the range to 1 to 7. The old risk rating of 4 was equivalent to the new risk rating of 5. I don’t think it’s quite right to say that the increases meant that previously low risk rated funds became high risk – the risk ratings increased but that doesn’t mean the funds can properly be described as high risk as such. But the fact is that the risk ratings did increase and Aviva didn’t tell Mr C about that. Aviva’s policy is to only notify investors if there’s a one step change of two or more levels – for example from a risk rating 3 to 5. As I’ve set out above, there’s been some debate if that complies with FCA regulations/guidelines. My understanding is that there’s no specific requirement for Aviva to proactively contact its customers every time there’s some change to a fund they are invested in. The FCA’s regulation is principles based and outcome focused. There are detailed provisions about some matters, but there won’t be a specific rule setting out what a business should do in every particular situation. As Aviva has explained, it will often rest on the wider regulatory regime. I also bear in mind that Aviva wouldn’t want to do anything which could be interpreted as giving advice, the requisite regulatory permissions for which Aviva, as the administrator of Mr C’s plan, doesn’t have. Taking into account what I’ve said below about the information available to Mr C, I don’t think Aviva did anything wrong by not notifying him of the changes to the fund risk ratings over the years. Mr C also received annual statements, which were presented as an opportunity for him to review his plan. The statements pointed Mr C to Aviva’s website. That gave information about its funds, including fund factsheets, which showed the risk rating. The statements also said that Mr C should review his investment selection. He could get more information from Aviva or seek financial advice. So Aviva did regularly prompt Mr C to review things. And he

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did have access to information about his plan. In my view, some responsibility rested on him to monitor his pension, including checking that it still met his needs and that the investments were suitable for him. I’ve seen that Mr C sought and obtained information about the fund switching, which had by then begun, in early 2017. Fund fact sheets were also provided and which showed the then risk ratings of the four funds into which the switches were being made. If Mr C didn’t think they matched his objective of being in the lowest risk rated fund, he could’ve opted out of the Lifestyle programme and had all his contributions invested in the fund(s) of his choice. From what I’ve seen, Aviva has administered the plan in line with the terms set out and the instructions given by the employer. I appreciate that the drop in the value of his fund will have impacted on Mr C but I can’t fairly hold Aviva responsible. Mr C’s responses to my provisional decision Mr C supplied our email exchanges with Aviva about its regulatory responsibilities to the FCA. He said Aviva had been disingenuous and had misled him by saying they weren’t obliged to tell him about increases in risk ratings and then saying they’d complied with FCA guidelines, whereas it had always been an internal policy. Mr C also felt Aviva hadn’t complied with PRIN or the Consumer Duty. Raising the risk rating by one level a year meant that, over five years, his fund went from a low risk rating of 1 to a high risk rating of 5 – yet Aviva apparently didn’t need to tell him his fund had gone from low to high risk. Aviva had said the Consumer Duty didn’t mean notifying customers of a small increase in risk rating. But firms had to ensure that any change didn’t compromise the customer outcome. In his case, the high risk investments had resulted in losses of circa £25,000. The FCA responded to Mr C on 13 March 2026 and Mr C provided us with a copy. Mr C also commented in detail on my provisional decision. As I’ve said above, he suggested a number of amendments, some of which I’ve adopted. I’ve summarised Mr C’s main points: • Aviva’s email of 5 May 2020 said the investment programme ‘automatically moves you from higher risk to lower risk funds as you get closer to retirement. Your scheme has enrolled you in this investment programme in order to protect your investments.’ But Aviva didn’t inform him until 2017 of risk rating changes to three of the four funds to which Aviva had already been transferring funds from July 2015 onwards. • He highlighted what Aviva had said in its email of 4 June 2025 about not being obliged to notify members of risk changes unless they changed by two or more levels. Aviva didn’t reply to his email requesting, among other things, details of the relevant regulations. Aviva then told us that it was its decision not to notify consumers about a risk rating change of one level. We said Mr C would need to raise that with the FCA. When he did, the FCA suggested he might want to ask for the specific guidance Aviva was relying on. We’d then asked for that but Aviva had confirmed that there wasn’t any specific regulation which required insurers or investment firms to notify a customer when an internal risk rating increases. • Against that background, he considered Aviva had misinformed him by first saying it wasn’t obliged to notify members of risk rating changes unless they changed by two or more. And then belatedly admitting, by saying that not notifying risk rating changes of one level complied with FCA guidelines, that there was no specific FCA guidance, rather an internal policy. • The FCA had provided him with its Principles for Businesses (PRIN) which he set out. He highlighted Principles 6, 7, 9 and 10. The FCA had also supplied its guidance

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about the Consumer Duty, details of which he also set out. • He said I hadn’t referred to what Aviva had said in its email dated 28 February 2017 about the reason for the change in funds being due to the pension automatically moving into the investment programme three years before retirement, which would end in July 2018. Or to Aviva’s email of 5 May 2020 which said that the investment programme automatically moved him from higher risk to lower risk funds as he got closer to retirement. That had given him comfort that Aviva would move his funds into the lowest risk funds. Instead, 75% of his fund was moved to higher risk funds from July 2015 onwards and which had subsequently lost significant value. • Aviva had said, in an email on 19 May 2025, that, ultimately, decisions are made by the scheme and the investment strategy had been chosen by Mr C’s employer. But his employer hadn’t informed him of any risk rating changes to the pension funds. And Aviva hadn’t answered his question about whether it had informed his employer about such changes. He noted what I’d said about not answering (or getting Aviva to answer) every point. But he felt his question was crucial in view of Aviva’s letter dated 1 September 2021. • He queried why, given that letter had referred to a Cautious Strategy Fund, he’d been invested in what he termed high risk category 5 investments. Aviva had replied that the Cautious Strategy Fund hadn’t existed at the time of his investment programme and was only available after the changes in 2021, when the Lifestyle programme he’d been in was closed. Aviva had said the closure wouldn’t necessarily impact him. But, as his fund had remained in the same investments, it did adversely affect him. The letter said he could opt out if he wasn’t happy. But he’d have had to transfer to another pension provider – Aviva also said his employer couldn’t contribute to another provider’s pension plan. He had no choice, otherwise his employer wouldn’t have continued to contribute to his pension until his retirement in June 2025. • He also wanted to know why the Defensive Strategy programme was closed, other than to achieve better outcomes as stated in the letter. He noted that we had no jurisdiction over the employer. But his view was, if Aviva didn’t inform his employer about risk rating changes, that evidence was crucial to his complaint that Aviva’s internal policy may have interfered with the provision of vital information to his employer and may explain why his employer didn’t notify him of any risk rating changes – because the employer didn’t know about any. • I’d said that recent market conditions had been volatile and it wasn’t up to Aviva to monitor fund risk ratings on his behalf. But his position remained that Aviva, as the scheme administrator, had a duty to inform him of risk rating increases from 2014 to 2017 and subsequently. • I’d also said that Aviva had regularly prompted him to review things. And that he did have access to information about his plan. But what I’d said about him having some responsibility to monitor his pension (including if the investments were suitable for him), had to be read in conjunction with what I’d said about the annual statements not saying that the risk ratings of any of the funds had changed. And that, if he was unaware that the risks had increased, he wouldn’t have known he needed to switch funds as he thought they were low risk anyway. His email exchanges with Aviva in 2017 onwards showed he did look at things. But he wasn’t made aware, prior to then, that there’d been any change in the risk ratings of the funds. • His view was that Aviva should’ve automatically moved 100% of his funds to the Sterling Liquidity Fund. Or sought his instructions before moving 75% of his fund from a lower risk fund to three higher risk funds. He didn’t consider he’d been treated fairly. Aviva should’ve informed him that it had a conflict: The Lifestyle programme required the transfer of 75% of his pension fund to the designated funds which were

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higher risk. Whereas Aviva had stated that the programme automatically moved him from higher risk to lower risk funds as retirement approached. • It seemed he’d made some valid points to the FCA as the information he’d provided would be passed on to the team responsible for supervising Aviva’s conduct. 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’ve carefully considered all the points made by Mr C in response to my provisional decision. As I’ve said above, I’ve made some amendments to the first few paragraphs setting out the background. But I haven’t adopted all Mr C’s suggestions. For example, I haven’t included the date of his 60th birthday. Our decisions are anonymised and we avoid specifying that sort of exact date as that might increase the chances of someone being identified. Mr C has also suggested what I said about the three year investment programme should be amended to say the ‘intention’ was to automatically move pension funds from higher risk to lower risk. But here I’m citing what Aviva actually said in its email of 5 May 2020 so the amendment isn’t appropriate. But, as I’ve noted above, the Lifestyle programme did originally start in July 2015 but was extended when Mr C’s SRD changed. Mr C said my provisional decision didn’t include the statement made by Aviva in an email on 28 February 2017 about the reasons for the change in his funds. I’ve amended my summary to expressly include the date of the email (28 February 2017) to which I was referring. Mr C also suggests I didn’t mention an email from Aviva dated 5 May 2020. But, as I’ve said above, I did. There are other references to that email too. I also noted what Mr C had said about having taken comfort from what Aviva had said. I’d add that I’ve read and considered everything, even if it’s not explicitly cited or if the contents of any particular communication aren’t set out in full. I’d emphasise that what I’ve said about what happened is a summary. Moving on to Mr C’s other comments, he considers Aviva has been less than truthful in what it’s said about the central issue in this case – whether Aviva was required to inform Mr C of changes to the risk ratings of the funds to which Aviva had been transferring his pension fund from July 2015 onwards as part of the Lifestyle programme. Aviva initially said that it wasn’t obliged to notify Mr C of changes to risk ratings. But later Aviva said it had complied with FCA guidelines. It appears that Mr C may view things differently, but I don’t see that represents any real change of position on Aviva’s part. I think it amounts to more or less the same thing – that Aviva hadn’t breached any regulatory provisions or guidance by not notifying risk rate changes. I can understand that Mr C expected Aviva to be able to identify and/or produce the applicable regulation or guidance and which would expressly set out what Aviva did or didn’t need to do when the risk rating of a fund changed. But, as I think Mr C now accepts, the regulations and other provisions are couched in broader terms and there won’t always be a specific regulation or guidance governing each and every scenario. However, Aviva is bound by COBS (Conduct of Business Sourcebook), the Principles for Businesses (PRIN) and the Consumer Duty. The FCA pointed Mr C to COBS 14.3.10R which is about ‘Keeping the client up-to-date’. The central requirement is: ‘A firm must notify a client in good time about any material change to the information provided under the rules in this section which is relevant to a service that the firm is providing to that client.’

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The first issue is whether changes over time to the provider’s risk ratings for the underlying funds held in a personal pension are material changes. Mr C says they are, because of his losses, but, in my view, it’s a matter of judgment which has to be considered in the overall context. Including that Aviva is the pension provider and not Mr C’s adviser and taking into account what COBS 14.3.2R says about the obligation to provide a general [my emphasis] description of the nature and risks of designated investments (the glossary definition of which includes a personal pension scheme) in sufficient detail to enable the client to take investment decisions on an informed basis [my emphasis again]. So Aviva’s obligations are general and in respect of the personal pension itself. I’m not sure that would extend to a requirement to provide what might be regarded as detailed information about the underlying investments. But, in any event, I think Aviva did provide sufficient information for Mr C to make informed investment decisions. The annual reports set out the funds he was invested in. I think Mr C could’ve found out without much difficulty what risk ratings those funds carried at any particular time. The FCA also referred to PRIN, the FCA’s high level standards which focus on consumer outcomes, fair treatment and clear communications. Mr C might again point to his losses as evidence that PRIN wasn’t met. But losses won’t necessarily mean a firm hasn’t complied with PRIN. In my view, the annual statements and other communications issued by Aviva did give Mr C clear, fair and not misleading information about his pension plan. Again I say that in the context of Aviva being Mr C’s pension provider and not his adviser, so ensuring suitability wasn’t down to Aviva. I don’t see there was any conflict of interest. Aviva was the scheme administrator. It acted on instructions given by the employer or the member. It wasn’t for Aviva to identify that Mr C may not want to follow the Lifestyle programme the employer had instructed. If that didn’t suit Mr C’s requirements it was for him to identify that and take appropriate steps to remedy the position. Nor did Aviva fail to protect Mr C’s assets. That provision in PRIN relates to wider measures such as segregating client money and a business having its own adequate resources. It doesn’t translate into an obligation to ensure that the value of Mr C’s pension fund didn’t fall. Overall, I think Aviva did meet its obligations to pay due regard to Mr C’s interests and treat him fairly. There’s also the Consumer Duty which is now Principle 12. It imposes higher standards than Principles 6 and 7 and so those don’t apply if Principle 12 does. But the Consumer Duty has only relatively recently been introduced. It applies to ‘open’ products and services from 31 July 2023 and to ‘closed’ products and services from 31 July 2024. In either case, the Consumer Duty isn’t retrospective, so it’s not central to the outcome here and where Mr C’s concerns date back to about 2015. I’m sorry that Mr C wasn’t convinced by Aviva’s explanation as to how its policy as to risk rating changes complied with its regulatory obligations. But what Aviva has said fits with my understanding of the regulatory framework. I note what Mr C has said about the FCA’s view. Mr C is of course free to share this decision with the FCA and/or The Pensions Regulator. Mr C says it’s crucial to find out if Aviva notified his employer of the risk rating changes. As I’ve said, I’d assume Aviva’s policy was the same for employers. So that only risk rating changes of two levels or more (at once) would be notified. Mr C can ask his employer to confirm what happened. The employer might be able to give further information about the reasons for the changes. I don’t think I need those details to determine Mr C’s complaint about Aviva fairly. As I’ve explained, Aviva was the scheme administrator. In much the same way as it was for Mr C to make sure the plan and the investments remained suitable for him, it was up to the employer (and its advisers) to monitor the plan and how it was operating, including the Lifestyle programme and make any changes deemed appropriate and notify them to Aviva to implement. Aviva isn’t responsible for the employer’s decisions and their timing.

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I don’t fully follow all Mr C says about Aviva’s letter dated 1 September 2021 and the changes it announced. The letter was correct that the new arrangements didn’t affect him as the Lifestyle programme for him had already come to an end and the fund movements had been completed. Mr C says he was adversely impacted because he remained in the same funds. But the letter set out the funds he was invested in and gave details as to how he could change his investments – although my understanding is that he didn’t want to as it would crystallise losses he’d by then suffered. The letter did mention opting out and transferring to another pension provider. Mr C says that would mean losing out on future employer contributions – although that may not have been the case if, as the letter mentioned, he was auto-enrolled back into the employer’s scheme (although revised terms and conditions might apply). But I don’t see why Mr C would’ve been transferring out anyway and when, as I’ve said, fund switches were possible even if Mr C didn’t want to do that. And he could direct future contributions to be made to the fund of his choice, as he did in October 2022. He could’ve also opted out of the Lifestyle programme earlier. He knew, from his exchanges with Aviva in 2017, that he was in that programme and that fund switches had already started. He was also informed about which funds were involved and how the switching would work. If he didn’t think that was suitable for him, he could’ve made changes. As Mr C has highlighted, I said in my provisional decision that some responsibility rested on him to monitor his plan and investments. But I also noted what he’d said about not having been informed about changes to risk ratings over the years and so he didn’t know he might need to switch investments. But, nevertheless, it would’ve been prudent for Mr C to have checked that, over the years, things hadn’t changed. The pension had been set up in 2010 and even if initially (up to December 2013) the funds’ risk ratings hadn’t changed, I don’t think it was safe to assume that would always stay the same. Mr C did make enquiries in 2017 and he was provided with the fund factsheets. I think they showed there’d been some upward movement in the funds’ risk ratings. If Mr C didn’t think they continued to match his objective of being in the lowest risk rated fund, he could’ve opted out of the Lifestyle programme and had all his contributions invested in the fund(s) of his choice. I don’t agree with Mr C’s suggestion that Aviva should’ve automatically moved all of his funds into the Sterling Liquidity Fund. That wasn’t consistent with the Lifestyle programme in which Mr C was enrolled. Mr C has referred, at times, to the aim of the Lifestyle programme being to move funds into the lowest risk funds rather than, as was the case, to lower risk funds. As I’ve explained, the pre-selected funds would generally be considered lower risk. Further, as I’ve said, the Lifestyle programme operated in the same way for all members, regardless of the funds they were actually invested in and their risk ratings. Nor do I agree that Aviva should’ve identified there might be an issue and, before embarking on the fund switches dictated by the Lifestyle programme, informed Mr C and sought his specific instructions. I think that would be outside Aviva’s role as the scheme administrator. It’s very unfortunate that things have worked out in the way they have for Mr C. I understand his distress about the fall in the value of his fund, despite the apparent protection offered by the Lifestyle programme. But, from what I’ve seen, Aviva has managed Mr C’s pension in line with the terms and conditions and the Lifestyle programme which came into effect as Mr C’s original SRD approached and which was extended when he deferred his retirement. Aviva’s role includes providing information about how the pension operates and fund choices so that Mr C can make informed decisions. From what I’ve seen, Aviva did that. Mr C’s losses reflect investment conditions more widely and uncommon volatility in the asset classes in which his fund was invested.

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I know Mr C will be disappointed with my decision but I’m unable to say that Aviva has done anything wrong. So I’m not upholding his complaint. My final decision I don’t uphold the complaint and I’m not making any award. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 20 April 2026. Lesley Stead Ombudsman

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