Scottish Widows Limited · DRN-6184638

The complaint Mr J has complained about the actions of Scottish Widows Limited (“SWL”) when he transferred his personal pension to a Small Self-Administered Scheme (“SSAS”) in 2025. He says SWL caused the process to become unnecessarily protracted, causing him financial losses and considerable distress and inconvenience. What happened Mr J held a personal pension with SWL. In 2025, he started the process to transfer his SWL pension to a SSAS which he held with his wife, Mrs J. At the same time, he started the process to transfer a personal pension from another provider to the same SSAS. Mrs J also did the same for two personal pensions she had. So, in total, Mr and Mrs J tried to transfer four pensions to their SSAS. Their intention was to use the SSAS to invest in a commercial property scheme. They only had a certain amount of time before the opportunity to invest in that scheme was lost. Mr J requested a transfer-out pack from SWL on 14 January. Because of delays in SWL sending it out, Mr J complained on 12 February. SWL accepted it had delayed the transfer and said it would pay Mr J for any financial losses that resulted once the transfer had completed. It also said it would pay Mr J £75 for the distress and inconvenience it had caused. Further delays, and a further complaint, followed. SWL subsequently found that Mr J didn’t have a statutory right to transfer. It nevertheless exercised its discretion to allow the transfer, albeit after it had asked Mr J to sign an indemnity agreement to protect it from any claims arising from having transferred to the SSAS. The transfer didn’t complete until 13 June, by which point Mr J’s complaint had been referred to us. After the transfer completed, SWL followed up on its offer to compensate Mr J for his losses. It said the transfer would have completed on 27 March had it acted as it should have done. It contacted the SSAS to find out the investments that had been made in order to work out the position Mr J’s SSAS would have been in had those investments been made on 27 March instead. It said it would pay compensation if the delay meant Mr J had lost out financially. SWL also said it would be paying Mr J a further £450 for the distress and inconvenience it had caused, bringing the total for that award up to £525. Originally, Mr J’s referral to us was because he was unhappy the transfer hadn’t gone through. He wanted us to instruct SWL to make the transfer and pay compensation for his losses (amongst other things). Now that the transfer has gone through, the complaint has moved on. Mr J’s concern now is with SWL’s compensation offer. He says it doesn’t recognise the extent of the distress and inconvenience he suffered or take into account the opportunity to invest in the commercial property scheme was lost. Our investigator reviewed Mr J’s complaint and thought SWL’s approach was fair and reasonable. Mr J disagreed and asked for an ombudsman to review his case. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable

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in the circumstances of this complaint. I won’t revisit the detail of SWL’s delays here. Our investigator has covered the ground comprehensively and there doesn’t now appear to be any dispute about what should have happened, which is for SWL to have transferred Mr J’s funds to the SSAS far sooner – on 27 March 2025. The issue before me now is about how SWL should put things right for Mr J. SWL’s approach to putting things right for Mr J assumes the investments the SSAS did make were the investments it would have made had the funds been available from 27 March 2025. I recognise Mr and Mrs J would likely have kept their funds liquid for a period had the transfer been paid at that point. But SWL’s approach allows for the investment decisions they subsequently made once the commercial property investment was no longer an option. I consider this to be a fair and reasonable approach when considering losses for the period as a whole. In contrast, Mr J says he would have invested in a specific commercial property scheme but that opportunity was lost because of the delay in transferring his SWL pension, as well as similar problems in transferring his, and Mrs J’s, other pensions. In his view, his losses stem from missing out on that commercial property scheme. He has itemised those losses and they include lost rental income and lost income derived from an alternative energy source. In total, he says the losses amount to around £14,000. I’m satisfied Mr J did intend to invest in the commercial property scheme. But it doesn’t follow that SWL should compensate him in the way he has suggested. To follow Mr J’s approach, I would need to be satisfied the investment would have been made but for SWL’s delays. That’s not a conclusion I can reasonably come to here given what happened with the transfers of Mr and Mrs J’s other pensions to their SSAS: Policyholder Provider Transfer Value (rounded) Date of transfer* Date transfer should have happened* 1 Mr J “Firm A” £26,000 14 April 14 April 2 Mrs J “Firm A” £38,000 14 April 11 April 3 Mr J SWL – the subject of this complaint £51,000 13 June 27 March 4 Mrs J “Firm B” £36,000** Transfer declined Subject of a separate unresolved complaint * All dates are in 2025 ** Based on transfer value quote given in January 2025 Mr and Mrs J have said the following about their investment: When funds were needed We were working to exchange in the last week of March 2025, with completion immediately thereafter. In practical terms we needed the bulk of the SSAS monies by end-March 2025; any slippage beyond early/mid-April meant the vendor wouldn’t hold. Why it didn’t go ahead (causation) • For clarity, we had not formally instructed a solicitor or exchanged because we were waiting for cleared pension funds. We had identified [firm of solicitors] as our intended firm and were ready to instruct on receipt of funds.

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• [Firm A] monies only reached the SSAS on 14 April 2025 (after the exchange window). • Scottish Widows paid on 19 June 2025 (their own target had been 27 March 2025 roughly 12 weeks late). • [Firm B] refused to transfer. Result: a funding gap at end-March/early-April and then staggered receipts. With no cleared funds, we couldn’t instruct, exchange, or complete; the vendor would not hold indefinitely, so the opportunity lapsed. So it’s evident SWL wasn’t the cause of Mr J missing out on his intended investment. A large proportion of the funds weren’t transferred until mid-April, with further steps required thereafter. The firm involved in those transfers (“Firm A”) wasn’t at fault, except for one minor delay that resulted in the funds being paid on the Monday instead of the previous Friday. Mr and Mrs J will be aware of ombudsman decisions relating to those two transfers. Therefore, given everything Mr and Mrs J have said about what needed to happen in order to invest as intended, I don’t consider it likely the investment would have been made but for SWL’s mistakes. As such, it wouldn’t be fair and reasonable for SWL to compensate Mr J for missing out on that investment. Similarly, it wouldn’t be fair and reasonable to ask SWL to compensate Mr J for the “preparatory costs” he says he incurred given SWL wasn’t the cause of those costs being ultimately to no avail. Mr J says such an approach creates perverse incentives because it would encourage firms to delay transfers secure in the knowledge that no compensation would be payable if other firms also delayed. I disagree for a number of reasons. First, this presupposes firms can, and do, act in a coordinated way when dealing with transfers, neither of which holds true in my experience. Second, SWL isn’t escaping the need to calculate losses. It has offered to put things right for Mr J. Our investigator agreed with the proposed approach, as do I. So SWL is being held to account for its failures – just not in the way Mr J would like. Third, it’s a hypothetical argument in any case. As Mr J will be aware, the firm dealing with his other transfer didn’t delay things. In sum, given what Mr and Mrs J have said about their commercial property investment, and the timings of their transfers, I can’t reasonably say the investment would have been made even if Mr J’s SWL funds had been available to invest from 27 March 2025. I’m therefore satisfied SWL’s approach to compensating Mr J is fair and reasonable in the circumstances. Mr J also says SWL’s total offer of £525 for distress and inconvenience is inadequate. He also says he should be compensated for the time he has expended on the issue. The extent of SWL’s mistakes isn’t in dispute here. I’ve no doubt those mistakes would have caused Mr J stress and would have been time consuming to deal with. I’ve considered everything he has said carefully. That said, I agree that the sum of £525 already offered by SWL is fair and reasonable in the circumstances and is in keeping with our approach to awards in situations such as this. With that in mind, I’m upholding this complaint in so far as I will be asking SWL to make good on its offer to compensate Mr J, to the extent it hasn’t already done so. Putting things right For the reasons given above, I consider SWL’s approach to putting things right for Mr J to be fair and reasonable. I can see SWL started the loss calculation process by contacting the SSAS on 16 June 2025

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for details on the investments it made. If it hasn’t already done so (and Mr J accepts this final decision) SWL should complete its loss calculation process in order to put Mr J as close as possible in the position he would now be in but for its mistakes. If it hasn’t already completed this process, and if there is compensation to be paid, SWL must pay it within 28 calendar days from the date it is informed by us of Mr J’s acceptance of my decision. If SWL does not pay the compensation by this date, it should pay 8% simple interest per year on the loss, for the period following the deadline to the date of settlement. I note here that when SWL contacted the SSAS shortly after the transfer in order to calculate losses, matters weren’t progressed – most likely because of the dispute between the parties about the best approach to compensation. Should Mr J accept this decision, SWL will likely have to contact the SSAS again to calculate compensation. Mr J, and his SSAS, should cooperate with this process. I’m satisfied SWL’s total offer of £525 for distress and inconvenience is fair and reasonable. My understanding is that SWL has already paid this. If so, it doesn’t have anything further to do in this respect. If it hasn’t already done so, or has only done so partially, SWL must ensure Mr J is paid £525 in total for distress and inconvenience. My final decision I uphold Mr J’s complaint to the extent outlined above and direct Scottish Widows Limited to take the steps outlined above to put things right. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr J to accept or reject my decision before 27 April 2026. Christian Wood Ombudsman

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