Aviva Life & Pensions UK Limited · DRN-6233850

The complaint Mr S complains that when he wanted to take a tax-free cash (TFC) lump sum from his pension plan with Aviva Life & Pensions UK Limited (Aviva) he was told he would need to transfer it to a self-invested personal pension (SIPP) in order to do so. But he says Aviva’s systems prevented him from opening the SIPP online and eventually – many months later – said that it was unable to transfer his existing fund into the SIPP and he would have to make a cash transfer instead. Mr S complains about the financial losses he says he’s suffered from the delays and subsequent fall in value of his fund, as well as the lack of response and poor administration from Aviva which he says have caused him significant distress and inconvenience. What happened Prior to his 60th birthday Mr S approached Aviva to see if he could access the TFC lump sum from his pension to improve his financial situation. Because Mr S’ plan didn’t allow for a drawdown facility he was told he would have to transfer to a SIPP – with Aviva or another provider – to access his TFC. When he began the process in February 2025, he also updated his address with Aviva. Aviva confirmed the change of address, although Mr S says the letter contained a slight misspelling of the address, and said it issued various transfer discharge documentation. Mr S says he then tried to open a SIPP account in March 2025 as he needed a plan number to enter onto a transfer form that had to be completed – but he was unable to open a SIPP online. Mr S says this problem continued throughout April and May 2025, so he made a complaint. At the end of May 2025 Mr S says he was finally able to open a SIPP account although his attempt to make a payment into it was rejected. He was then able to complete the form required to transfer his existing fund to the new SIPP. But he complained that by this time the value of his plan had fallen by over £1,200 – so he wanted his transfer to be progressed using the higher value that was obtainable when he began the process. Aviva explained that it had experienced a systems problem which prohibited the opening of SIPP accounts online for some time. It apologised for any inconvenience caused and paid Mr S £150. But it also said that now he had been able to open a SIPP it wouldn’t consider compensation for any investment loss because as his investments had remained within the same funds, they had simply suffered the same market fluctuations as if they had been transferred to the new plan. Aviva wrote to Mr S in June 2025 again enclosing various documentation – including another transfer discharge form which needed to be returned. After Mr S returned the form, he received a letter from Aviva which stated that it couldn’t accept the transfer because his existing fund couldn’t be held on the investment platform which would hold the SIPP. It said he would need to apply for a cash transfer instead. Mr S complained again about the delays and service he’d received. Aviva then paid Mr S an

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additional £100 compensation for these errors and poor service. But Mr S thought that Aviva had wasted several months, during which it could have made him aware that the fund couldn’t be transferred, and which meant he would have to complete a cash transfer with the additional bid and offer spread cost he would incur when reinvesting into a new plan. He said he would move his pension elsewhere once the complaint had been resolved to his satisfaction. He thought compensation to the value of 5% of the current fund value would be a satisfactory resolution to him. Aviva said it hadn’t made any errors regarding the transfer process. It said Mr S had been issued with the necessary forms to start the transfer process in February 2025 but these weren’t returned until 12 June 2025, which was the first time it was able to confirm that the fund to be transferred wasn’t available to the new SIPP. It thought it had made Mr S aware that he couldn’t complete a fund-to-fund transfer – so it wasn’t responsible for any potential investment loss. It accepted there had been a delay in opening the SIPP – for which it had paid Mr S compensation – but that situation had now been resolved. Investigation outcome Mr S wasn’t happy with the response, so he brought his complaint to us where one of our investigators looked into the matter. They made the following points in support of their assessment: • It was clear that Mr S had experienced significant delays in opening his SIPP. This could have been because of Aviva’s error when changing Mr S’ address but in any case, he wasn’t able to open the SIPP until May 2025. • The investigator thought that had the SIPP been opened around 14 March 2025, because the transfer would have had to be in cash, it was unlikely the transfer – and access to TFC – would have been possible before the end of the 2024/2025 tax year. • The pension had remained invested in the same fund throughout this whole matter, and the fund was subject to the usual market falls and rises affecting its value. • Aviva wasn’t able to confirm Mr S’ fund couldn’t be accommodated into the SIPP until it received the unit transfer application form in June 2025. The form also outlined that a transfer might not be possible if the new SIPP couldn’t accept the original funds. • And because Aviva made Mr S aware of this problem with the re-registration of the fund within a week or so of receiving the unit transfer form, they didn’t think Mr S had lost out financially as a result of any delays. • As they didn’t think Mr S would have been able to his withdraw his TFC and any other income before the end of the tax year – and his funds had remained invested throughout the process – they thought Aviva’s payment of £250 total compensation for its errors and delays was fair and reasonable. Mr S didn’t agree. He said he didn’t try to open a SIPP between April and May 2025 as he was waiting for Aviva to provide an update on why he couldn’t open the account. He thought Aviva’s service by not confirming when he could open a SIPP or providing an explanation for what was happening was “poor.” He thought he hadn’t been treated fairly and that we should challenge Aviva over its “processes, customer service, and adherence to complaint procedures.”

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He asked for his complaint to be passed to an ombudsman – so it was passed to me to review. My provisional decision I issued a provisional decision in which I said the complaint should be upheld and Aviva should pay additional compensation. I made the following points in support of my findings: • It would seem it was more likely than not that Aviva’s “systems failure” and failure to update Mr S’ address correctly when notified caused the delay in opening the new SIPP account. Consideration should therefore be given to a compensatory award to reflect the trouble and upset the delay caused Mr S. • I also considered the other financial losses that Mr S said he’d suffered. In the first instance I wasn’t persuaded that he would have been able to withdraw income to mitigate his income tax liability for the 2024/2025 tax year. I didn’t think it was likely that the cash transfer would have completed before the end of the tax year for Mr S to be able to have taken income in that same tax year. • There was also no evidence to suggest that Mr S had wanted to draw income in excess of his TFC and, if Mr S had only wanted to draw his TFC as he indicated at the start of the process, this wouldn’t have affected his tax liability as it was tax free. And regarding Mr S’ assertion that he lost the opportunity to invest the TFC, I hadn’t seen any evidence to support the claim of how that would have been invested so it wasn’t possible to assess his consequential loss in that respect. Although I thought the potential loss of opportunity should be considered as further distress and inconvenience to him. • In respect of Mr S’ claim against the fund value fall that occurred prior to transfer I thought that, as the transfer would have always needed to be a cash transfer, Mr S would either have gone ahead with the transfer if it had happened when I thought it could have done (end of March 2025) in which case he would have suffered the fund loss in any case, or he would have postponed the transfer until the fund value recovered – which is the same position as he now finds himself in. So I didn’t think there was an investment loss that needed to be considered. • But I didn’t accept Aviva’s suggestion that Mr S’ failure to complete the unit transfer form sooner caused the delay in it notifying him that his particular fund couldn’t be transferred. The form required a plan number to be inserted and, as Mr S didn’t have a plan number because the SIPP wasn’t opened, I didn’t think Mr S could have made Aviva aware of the fund he wished to transfer earlier than he did. • I thought carefully about the compensatory award Aviva should make. I didn’t think its offer of £250 reflected Mr S’ additional concerns and raised expectations of potentially drawing further income and investing the TFC. I thought Aviva should pay Mr S a further £150. Responses to the provisional decision Mr S didn’t respond to my provisional decision, but Aviva said it didn’t agree with the outcome. It made the following points in response:

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• Mr S has yet to complete the transfer of his existing funds into the SIPP. This would support the idea that, even if he had been notified earlier that an in-specie transfer wasn’t possible, it was uncertain he would have proceeded with a cash transfer. • Aviva didn’t receive the unit transfer forms until 12 June 2025 – some four months after they were issued and 11 working days after the SIPP was opened. This was the first time it had been notified of the fund details involved and it advised Mr S almost immediately that the funds weren’t available on its platform and so the transfer would need to be in cash. • It could only address the feasibility of an in-specie transfer when it was aware of the fund in question – so it didn’t think it had contributed to the delays in making Mr S aware that an in-specie transfer wasn’t possible. The period during which the transfer form remained outstanding was outside of its control. • So as the transfer hasn’t yet been completed any recommendation for additional compensation shouldn’t be attributed to actions that it took. It maintained that it responded promptly at each stage of the process and hasn’t caused any of delays suggested by Mr S. 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. And having done so I see no reason to depart from my provisional findings, so I’ll set out my final reasons below. The delays in opening the SIPP Mr S wanted to take the TFC from his existing pension with Aviva, but his plan didn’t allow him to do that so he was told he would need to transfer to a SIPP with Aviva or another provider. Mr S decided to transfer to a new SIPP with Aviva and made his request on 20 February 2025 – when he also made Aviva aware of his new address. This was confirmed by Aviva who said it also issued the required transfer documents to Mr S around this time. But the SIPP wasn’t opened until 28 May 2025 and Mr S said he made a number of attempts to open the account online during March and April 2025 but kept receiving error messages. He said he contacted Aviva each time for help but wasn’t given a reason for the problem or a solution to be able to open the account. I’ve seen screenshots of the messages and requests for help he sent during this time. But the only evidence I’ve seen of an explanation from Aviva was within its final response letter to Mr S when it confirmed “I can confirm that a system issue on our side temporarily prevented new SIPPs from being opened.” So based on Mr S’ unsuccessful attempts to open the SIPP – and Aviva’s “explanation” – I can only conclude that the delay in opening the account was attributable to Aviva. Aviva has acknowledged this problem and paid Mr S a total of £250 for the inconvenience caused by the delay and other administrative problems. I’ll cover whether I think this was fair and reasonable below, but I also need to look at the other financial costs and losses Mr S said he suffered because of the delay in opening the SIPP.

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Mr S’ further financial loss claims Mr S says his original plan was to take TFC from his plan by the time he reached age 60 – so that he could stabilise his financial situation. He says that had the SIPP been opened and the transfer then completed in a timely manner he would have been able to draw further income before the end of the tax year and mitigate his income tax liability – as well as being able to invest his TFC at the earliest opportunity. I understand Mr S’ position here – although I haven’t seen any evidence in his communications with Aviva that he intended to draw additional income beyond the TFC, or that he had plans to immediately invest the TFC. But even if I am wrong in my assumption about his plans, I think it was unlikely that he could have taken additional income in the 2024/2025 tax year. I say that because even if the SIPP was opened shortly after Mr S’ first online attempt on 11 March 2025 there would only have been around three weeks before the end of the tax year. Aviva has set out that its service standards for a transfer where a fund needs to be disinvested and then transferred as cash are between three and six weeks. So I think it was unlikely that the cash transfer would have completed in time for Mr S to make income withdrawals before the end of the tax year. And in respect of investing the TFC, I haven’t been presented with any evidence to support the idea that Mr S would have invested or how he intended to do this – so it simply isn’t possible to quantify any possible loss here. Mr S’ principal claim for financial losses arises from the fall in the pension fund value from the time he first requested the transfer to when he was told it wasn’t possible to transfer in- specie. Mr S calculated this to be around £1,200 but thought Aviva should compensate him to value of 5% of the lower fund value as a reasonable resolution to the matter to include any loss of investment growth. I’ve thought carefully about this drop in value and whether it was an avoidable loss caused solely by the delay in opening the SIPP. I began by looking at when I think the SIPP could have been opened if there were no delays when Mr S first applied online. This suggested the SIPP could have been open shortly after 11 March 2025. Assuming that Mr S had made Aviva aware of the fund that he wished to transfer shortly afterwards when he was aware of a plan number – and I’ll return to this point later – Aviva would more likely than not have confirmed the unavailability of the fund on the platform and the need for a cash transfer by the end of March 2025. But by this time the fund value had already fallen and on 1 April 2025 Mr S has told us it had fallen by around £1,200. So Mr S would have needed to decide whether to go ahead with a cash transfer at the lower value or suspend the transfer of the fund until the value recovered. I can’t be sure what would have happened in this hypothetical situation but Mr S’ subsequent actions in not transferring would give the best indication of what he might have done. But in any case, in respect of the loss in fund value, whichever course of action Mr S would have taken would have either resulted in an acceptance of the drop in value or he would have deferred the transfer – which is what he eventually did – and therefore he would have been in exactly the same position as he now finds himself. So I don’t think, based on what I think would have happened without any delays, that Mr S would have incurred a financial loss which could be directly attributable to Aviva. However, while I haven’t been able to conclude that Mr S suffered a direct financial loss as a result of the delay in opening the SIPP, I do need to consider whether the delay caused Mr S further trouble and upset. I say that because although I don’t think there is a direct, quantifiable loss, Mr S might have suffered from the raised expectations of being able to carry out the plans he’s told us about which I set out above, and the more general

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expectation that he could transfer in-specie, which he says he only found out wasn’t possible some four months after he first requested the transfer. Further compensation as a result of the delays Mr S says that when he first tried to open the SIPP account he was aware that one of the transfer forms he received, namely the “Unit Transfer-In form,” required him to give details of his existing fund. I accept what Aviva has said in response here, which is that until it received that form, it wouldn’t have known which fund was to be transferred and therefore could only make Mr S aware the fund couldn’t be held on its investment platform – and so a cash transfer would be required – at that point. So it says it did make Mr S aware as soon as it received that information and therefore didn’t cause any delay or unnecessary distress to Mr S. But the form required the plan or account number of the new SIPP to be inserted in the first section as well as details of the existing fund to be transferred. Bearing in mind Mr S’ numerous (unsuccessful) attempts to open the SIPP I think it’s reasonable for him to assume that the form couldn’t be completed until the new plan number was known. I also think it’s more likely than not that Aviva would have rejected the form as being incomplete or at least would have held the form as “pending” – without progressing it – until the plan number was submitted. So I don’t think Mr S’ actions were unreasonable here, considering he was becoming increasingly frustrated in his attempts to open the SIPP. So, and I know Aviva has a different view on this, I think the delay in submitting the unit transfer form and learning that the transfer would need to be in cash, resulted directly from the delay in being able to open the SIPP. And I’ve already established that avoidable delay was Aviva’s responsibility. So I’ve concluded that the expectation of the transfer being made in-specie was drawn out over an extended period of time and could have been avoided if the SIPP had been opened in a timely manner so that the unit transfer form could have been returned and the outcome of the transfer known much earlier in the process. Mr S has told us of the impact this delay had on him. He said the delay has affected his existing health issues and raised expectation of an in-specie transfer over an longer period than was necessary. He has previously explained that a cash transfer would cause him additional costs and charges and he wanted to avoid such issues if possible. I can imagine that only finding out belatedly, when it could have been determined much earlier that he couldn’t draw the TFC and income in the way he had hoped, would have caused Mr S additional frustration, disappointment and concern at a time when he simply wanted to draw his TFC around his 60th birthday. Of course it should be remembered that ultimately Aviva was correct in confirming the transfer couldn’t complete on a fund-to-fund basis and, despite Mr S’ expectations, would always have needed to be a cash transfer even, more likely than not, if he were to transfer to another provider. But I think the delay in finding this out did have an additional impact on him beyond the other frustration of not being able to open the SIPP in a timely manner. I’ll set out below what Aviva needs to do to put this right. Putting things right Aviva has paid Mr S £250 for the distress and inconvenience caused by the delay in opening the SIPP and a lack of communication leading to a poor customer experience. I think that’s a fair and reasonable payment for those delays. But I don’t think the payment recognises the

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impact on Mr S from the delay in establishing that the transfer would need to complete in cash rather than the expectation of an in-specie transfer. I’ve already set out why I think the delay in opening the SIPP – which was Aviva’s responsibility – directly affected the time it took to establish that Mr S’ fund couldn’t be transferred to the new platform. I think the impact this matter had on Mr S warrants a further compensatory payment. Our website sets out guidance around payments for distress and inconvenience caused by matters such as these. Where the impact of a business’s actions might cause considerable distress and worry over many weeks and months, payments of between £300 and £750 should be considered. So in this case I think Aviva should pay an additional £150 – giving total compensation of £400 – which I think is within the range of what is fair and reasonable for the overall impact all the issues had on Mr S in these circumstances. My final decision For the reasons that I’ve given I uphold Mr S’ complaint against Aviva Life & Pensions UK Limited. Aviva Life & Pensions UK Limited should pay Mr S an additional £150 for the impact it’s delays had on him. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr S to accept or reject my decision before 23 April 2026. Keith Lawrence Ombudsman

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