Target Life Personal Pension Plan · CAS-58713-Q7F8

CAS-58713-Q7F8

Ombudsman’s Determination Applicant Mr S

Scheme Target Life Personal Pension Plan (the Plan)

Respondent Phoenix Life (the Administrator)

Outcome

Complaint summary

Background information, including submissions from the parties The sequence of events is not in dispute, so I have only set out the salient points. I acknowledge there were other exchanges of information between all the parties.

Mr S joined the Plan in May 1986. The Plan was invested in the Target Life Managed Pension Fund (the Fund) and the administrator of the Plan was Target Life. From May 2007, the administration of the Plan was taken over by Abbey Life and subsequently by the Administrator.

Mr S paid a monthly contribution of £75 into the Plan until May 1987, at which point he stopped paying contributions and his active membership of the Plan ceased. At that time, the value of the Plan was £900.

Mr S was sent annual pension illustrations until 2021. The pension illustrations showed that the overall value of the Plan was decreasing.1 The pension illustrations issued between 2017 and 2021 contained information about charges applied to the Plan.

Mr S said he lived at ‘Address 1’ from November 1987 until August 2006, ‘Address 2’ from August 2006 until December 2015 and that he has lived at ‘Address 3’ since December 2015.

1 See the Appendix 1 CAS-58713-Q7F8 Mr S said that he arranged with the Post Office to have his mail redirected on all three properties.

On 22 January 2020, Mr S telephoned the Administrator to enquire about the Plan. The Administrator informed him that the value of the Plan was £19.37. In response, Mr S made a complaint to the Administrator. Mr S claimed that he had been mis-sold the Plan and that he had not been made aware of the applicable charges.

On 5 February 2020, the Administrator informed Mr S that it was not upholding his complaint. The Administrator said, in summary:-

• The advice to join the Plan was given by an independent financial adviser (the IFA), so any complaint about it should be directed to the IFA. As the IFA is no longer trading, the complaint should be directed to the Financial Services Compensation Scheme.

• Mr S was informed about the value of the Plan and the applicable charges through the annual pension illustrations sent to him.

• The Fund value is dependent on stock markets, so it fluctuates and cannot be guaranteed.

• While the Fund continued to be invested, the monthly charges and the charges regarding the relevant benefits continued to apply. So, the value of the Plan decreased over time.

• It was made clear to Mr S in the Plan conditions that monthly charges would continue to apply after he ceased making contributions to the Plan.

On 17 April 2023, the Administrator sent Mr S an End of Policy notice. It stated that the Plan had lapsed, as the charges applied to the Plan since his payments into it ceased, had exceeded the value of the Plan.

Adjudicator’s Opinion

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2 See the Appendix 3 CAS-58713-Q7F8 Ombudsman’s decision

I do not uphold Mr S’ complaint.

Anthony Arter CBE

Deputy Pensions Ombudsman 22 September 2023

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Appendix The pension illustration dated 28 November 2001 stated that the projected value of Mr S’ pension from the Plan was £267 for the lower illustration and £554 for the higher illustration. It said the transfer value was £230.39.

On 6 December 2004, Abbey Life sent Mr S a letter informing him that it could not send him a projection of benefits due to the low value of the Plan.

The pension illustration dated 17 May 2005 stated that the value of the Plan on 14 May 2005 was £591 and the transfer value was £179.

The pension illustration dated 16 May 2006 stated that the value of the Plan on 14 May 2006 was £663 and the transfer value was £203.

The pension illustration dated 17 May 2007 stated that the value of the Plan was £651.87 on 14 May 2007 and the transfer value was £202.

The pension illustration dated 16 May 2008 stated that the value of the Plan on 14 May 2008 was £581 and the transfer value was £180.

The pension illustration dated 19 May 2009 stated that the value of the Plan on 14 May 2009 was £413 and the transfer value was £125.

The pension illustration dated 18 May 2010 stated that the value of the Plan on 14 May 2010 was £436 and the transfer value was £125.

The pension illustration dated 17 May 2011 stated that the value of the Plan on 14 May 2011 was £408 and the transfer value was £108.

The pension illustration dated 17 May 2012 stated that the value of the Plan on 14 May 2012 was £323 and the transfer value was £73.

The pension illustration dated 17 May 2013 stated that the value of the Plan on 14 May 2013 was £311 and the transfer value was £43.

The pension illustration dated 16 May 2014 stated that the value of the Plan on 14 May 2014 was £253 and the transfer value was £11.

The pension illustration dated 19 May 2015 stated that the value of the Plan on 14 May 2015 was £251 and the transfer value was £0.

The pension illustration dated 17 May 2016 stated that the value of the Plan on 14 May 2016 was £247 and the transfer value was £0.

The pension illustration dated 17 May 2017 stated that the value of the Plan on 14 May 2017 was £295.76 and the transfer value was £0. It also stated that annual management charges and fund expenses between 14 May 2016 and 14 May 2017 had amounted to approximately £3.50 in total.

5 CAS-58713-Q7F8 The pension illustration dated 17 May 2018 stated that the value of the Plan on 14 May 2018 was £310.27 and the transfer value was £0. It also stated that Mr Y had outstanding charges amounting to £251.98 which could only be taken if he retired or transferred to another pension provider.

The pension illustration dated 17 May 2019 stated that the value of the Plan on 14 May 2019 was £21.96 and the transfer value was £10.98. It also stated that annual management charges and fund expenses between 14 May 2018 and 14 May 2019 had amounted to approximately £1.93 in total.

The pension illustration sent to Mr S on 19 May 2020 stated that the value of the Plan on 14 May 2020 was £15.48 and the transfer value was £10.37. It stated that a charge of £5.11 would be applied if Mr S transferred to another pension provider. It also stated that between 14 May 2019 and 14 May 2020, charges amounting to an estimated £5.98 had been applied to the Plan. It contained a breakdown of the reason for each charge.

The pension illustration sent to Mr S on 18 May 2021 stated that the value of the Plan on 14 May 2021 was £11.73 and the transfer value was £11.73. It stated that between 15 May 2020 and 14 May 2021, charges totalling an estimated £6.04 had been applied to the Plan. It provided a breakdown of the reason for each charge.

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