Royal London has been told to pay £500 to one of its clients for “distress and inconvenience” caused by issuing incorrect information.
The Pensions Ombudsman partly upheld a complaint relating to its personal pension plan.
Mr S complained Royal London gave him “incorrect and misleading information” in an annual benefits statement which he claimed meant he missed an opportunity to make additional pension contributions.
The ombudsman’s report, published on Friday (August 9) set out the case.
It said Mr S contacted Royal London in March 2021, after being made redundant, to ask whether his January statement took into account the fact pension contributions would no longer be made as he was no longer employed.
At the time, he was told this was the case. But six months later, in September, he received a retirement options letter which did not match up with what he was given in January.
When he got through to Royal London, after being cut off twice, he was told he had been misinformed in March 2021.
An initial adjudicator's response said Royal London’s explanation for the error “lacked credibility”.
It claimed the assumptions in the January 2021 statement were that no additional contributions over and above those already in payment would be paid.
In his decision Anthony Arter, deputy pensions ombudsman, said he did not accept this interpretation.
He wrote: “I find that Royal London knew that pensions contributions to the plan had stopped but erred in not taking this into account in the calculation of the estimated values in the January 2021 statement.
“It then compounded its error by attributing a meaning to the contribution assumption that could not be reasonably attributed to it.”
But Arter said it did not automatically follow that Mr S would have made additional pension contributions from his savings had he been given the correct information.
He said: “I find that Royal London’s provision of incorrect information and failure to correct its error in a timely manner amounted to maladministration as a result of which Mr S has experienced significant distress and inconvenience.”
The ombudsman ruled Royal London should pay Mr S £500 and gave it 28 days from the date of the decision to make the payment.
Royal London apologised for the error and said their service fell short on this occasion.
A spokesperson said: "Unfortunately, the information provided to Mr S relating to his projected pension wasn’t based on his up-to-date circumstances.
"We’re sorry that our service fell short of our usual high standards."
tara.o'connor@ft.com
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