Hargreaves Lansdown cleared by the Pensions Ombudsman over death benefits claim
Jacqueline Barnicoat complained to the Ombudsman that financial services firm, Hargreaves Lansdown, had taken too long to direct death benefits payments to her, as had been instructed by her late partner. The Ombudsman threw out the claim saying that the firm’s actions were ‘justified and not unreasonable’.
The Ombudsman found a string of disputes over the relationship prior to the partner’s death warranted Hargreaves’ decision to delay paying out on the claim.
The facts of the case are that Alan Bunn died in September 2012 after suffering a stroke. He had previously nominated his partner, the complainant, to receive the benefits from his self-invested personal pension (SIPP) in an ‘expression of wish’ form in March 2012 at the discretion of Hargreaves.
However, Barnicoat, did not receive the benefits until March the next year, following an investigation by the Bunn’s children as to who should be the beneficiary.
Bunn’s two children challenged on the basis that there were irregularities in Barnicoat’s behaviour in the days leading up to their father’s death and that the police and fraud agencies should be involved.
Hargreaves accepted the request for additional time before transferring the money because of the seriousness of the allegations made by the children.
On 1st March 2013, Hargreaves told Barnicoat that it had decided she should be the sole beneficiary, but were giving Bunn’s children 14 further days to submit evidence and that if they did not hear from them by the deadline, they would pay her a tax free lump sum and also supply her with details of the benefit options available from the fund.
Deeming that Bunn’s children had provided insufficient evidence to challenge the nomination, Hargreaves decided to designate Barnicoat as the beneficiary in September 2013.
The firm apologised to her for the delay in reaching their decision and for not keeping her updated on what had been happening.
Barnicoat claimed the actions taken by Hargreaves had caused her financial harm and, whilst the Ombudsman said Hargreaves could have been more proactive in dealing with the case, it found it “regrettable” that she had declined two separate offers from Hargreaves of an interim payment from the SIPP to assist her financially while the delay was going on.
This weakened her case, arguing she had suffered financial hardship because of the delay.
The Ombudsman said: “[Hargreaves] had to deal with some very emotive issues and it is clear from the evidence that the potential beneficiaries found it very difficult to understand that there was a range of possible ways in which [Hargreaves] could have exercised their discretion to award the death benefits.
“Given the range of discretion, there was unlikely to be only one answer that was to be regarded as ‘right’ with all others being wrong.
“The decision and the exercise of discretion by [Hargreaves] was, therefore, not clear cut in Mr Bunn’s case.
“In light of this I do not consider it unreasonable for [Hargreaves] to have allowed Mr Bunn’s children additional time to conclude their private investigation into their father’s financial affairs and the circumstances surrounding his death, and also to comply with their request not to disclose the reasons behind the investigation to Mrs Barnicoat.”
The Ombudsman did however recognise that she had suffered distress and inconvenience and subsequently awarded her a payment of £500 by way of compensation.