jar of pension savings

Latest developments in long-running Options Pensions case

A long-running court case between a pension saver and SIPP provider is looking likely to progress to the Supreme Court following a recent hearing at the Court of Appeal.

In the latest development, the Court of Appeal overturned an earlier decision by the High Court and decided that Options Pensions – formerly Carey Pensions UK LLP – should not have accepted Mr Adams’ (the complainant) transfer into a SIPP. The basis for the action against Options Pensions was that the transfer “advice” received by Mr Adams came from an unregulated introducer.

The Court of Appeal also clarified:

  • The law around Section 27 of the Financial Services and Markets Act (FSMA) 2000
  • What constitutes advice
  • What this means for pension providers who accept business from companies who contravene the FSMA by providing advice without authorisation to do so

Court deems Options should return complainant to previous savings position

The Court of Appeal ordered the firm to pay Mr Adams compensation of the Notional Transfer Value (NTV) – essentially what Mr Adams’ pension would be worth today had he not transferred.

What does the Financial Ombudsman Service say?

So far, the Financial Ombudsman Service (FOS) has agreed with the court rulings.

However, while the FOS considers the relevant laws and regulations, it makes its judgments on a more straightforward basis of what is fair and reasonable to the client, in this case, Mr Adams.

The key considerations of the FOS include:

  • What should Options Pensions have done upon receipt of Mr Adams’ transfer request, considering the principles they should have been following in conducting their business?
  • If Options Pensions had been following those principles, what would have happened to Mr Adams’ funds?

Like the court, the FOS has also found that clients who have lost cash due to mis-sold transfers should be put back into the position they would have been in had the transfer not gone ahead.

Will the FSCS have to fall into line?

While the FOS and Court of Appeal have ruled that clients should receive the NTV, the Financial Services Compensation Scheme (FSCS) only pays out the actual value transferred when dealing with cases where SIPP or other pension providers have defaulted.

This matter is likely to go to a judicial review in future with an eye on bringing the FSCS into line with other bodies.

Have you lost money due to a mis-sold Options Pensions transfer or due to another mis-sold pension product? Contact LawPlus here for a free, no-obligation review of your pension transfer.

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