Phoenix Life Limited · DRN-6090671

The complaint Mr B complains that Phoenix Life Limited failed to provide him with all of the options that should have been available to him when he reached his normal retirement date (NRD) and has refused to backdate the commencement of his pension to his NRD. He also complains about poor service. Mr B is represented by Mrs B. What happened Mr B had a Freedom Bond (known as a Section 32 Buy-out policy) with Pearl Assurance. The policy is now managed by Phoenix Life Limited (Phoenix) and so it is responsible for dealing with Mr B’s complaint. Mr B’s normal retirement date was October 2024. At that time, he thought he should be entitled to a tax-free cash payment or to fully encash the policy. He says the policy document refers to the fact that both of these options could be exercised and he has also provided copies of correspondence Phoenix sent to him in or about 2016/2017 which included illustrations for both a tax-free cash sum and a cash-in lump sum. However, in 2024, Phoenix told him that neither of these options would be available to him. He complained to Phoenix. Phoenix investigated his complaint. It sent him a final response letter dated 8 January 2025 (the First FRL). It said that under his policy he was guaranteed to be paid a minimum pension amount (known as a Guaranteed Minimum Pension - GMP). In order to fund the GMP his policy would have needed to be valued at a significantly higher amount than it had been valued at. However, because he was entitled to be paid the GMP, Phoenix was obliged to honour that promise and it would do so. Phoenix also said that because of the value of the policy there was no excess to fund any tax-free cash and full encashment was also not an option. Mr B didn’t accept this, and Phoenix sent a further letter dated 30 April 2025 to provide more detail and clarification about what it had said in its First FRL. It did not change its view about Mr B’s complaint. However, it acknowledged that there had been delays with its complaint handling process and it paid him £100 by way of apology for that. On 12 September 2025 Mr B contacted Phoenix again. He complained about a number of matters which by way of summary were: • He wanted Phoenix to backdate his GMP payments to his NRD; • He thought he should be entitled to the full lump sum option, and he referred to the terms and conditions for his policy; • He raised a number of issues about poor service. Phoenix sent him a quotation and forms for completion so that he could apply to start his

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pension payments. It did that on 16 September. It treated his complaint as closed but re- opened it again on 26 September following further queries from Mr B. Phoenix issued a final response letter dated 27 October 2025 (the Second FRL). In the Second FRL Phoenix said that it had processed his annuity application without undue delay. The annuity had commenced on 27 October 2025. It said it could not backdate the annuity to Mr B’s NRD because he hadn’t completed the necessary forms to ask for his annuity to be paid. It reiterated that there was no option to provide full encashment of his policy because it was obliged to pay him a GMP. Phoenix did acknowledge that its service could have been better. It noted it hadn’t returned some calls after agreeing to do so and it noted that it had closed the complaint made on 12 September too soon. But it said it wasn’t responsible for post which Mr B said he hadn’t received. It paid him £100 to compensate him for the poor service and paid him £10 towards the cost of his telephone calls. Mr B did not accept this. He referred his complaint to our service. Our investigator looked into Mr B’s complaint. By way of summary, he said: • The First FRL stated that if Mr B wasn’t happy with what Phoenix had said he should refer his complaint to our service within six months of the date of the letter. He hadn’t done that and Phoenix had not consented to our service considering this part of his complaint. Mr B hadn’t told us about any exceptional circumstances which had prevented him from referring his complaint within the time period. So, our investigator said he could not consider the matters dealt with in the First FRL because Mr B had referred it to our service too late. • Our service could consider the matters dealt with in the Second FRL. However, our investigator didn’t think Phoenix had done anything wrong when it hadn’t backdated the annuity to Mr B’s NRD. He said Mr B had only completed the forms to apply for his pension in October 2025. He said Phoenix had explained why Mr B was not entitled to fully encash his policy. He noted that Phoenix had acknowledged it had provided poor service. However, he thought that the payment it had made was fair and reasonable in all the circumstances that applied. Mr B did not agree with what our investigator said. He reluctantly accepted that the matter dealt with in the First FRL had been referred to our service out of time. However, he pointed out that he hadn’t applied to take his pension because he thought that the options provided by Phoenix were incorrect. He’d ultimately applied to take his pension in October 2025 – but he had only done so under duress. He thought it was fair to expect Phoenix to backdate his pension to his NRD. He also didn’t think that £100 was sufficient compensation for the poor service he’d experienced. Because Mr B disagreed, his complaint has been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Mr B has raised several issues in his complaint to our service. As our investigator said, our service cannot consider all of the issues which he has raised. I’ll explain why we can only consider some of the issues he’s referred to our service.

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The First FRL For mainly the same reasons as our investigator set out, I’ve decided that we cannot consider the matters which were dealt with in the First FRL. The First FRL was dated 8 January 2025. In that letter Phoenix explained that because the value of Mr B’s fund was insufficient to cover the revalued GMP, it was only able to provide an annuity option to him. It could not permit him to take 25% of his fund as a tax-free lump sum or to take the whole fund as a taxed lump sum. It also could not allow him to transfer his pension to another provider unless the other provider agreed to provide the GMP. Phoenix said it would honour the GMP Mr B was entitled to receive. The First FRL also explained that Mr B had a right to refer his complaint to our service – but he had to do so within six months of the date of the letter. Phoenix sent a subsequent letter dated 30 April 2025, in which it provided further information regarding the Guaranteed Minimum Pension (GMP). However, in its letter dated 30 April 2025 Phoenix reiterated that it believed it had already fully addressed Mr B’s complaint and it had rejected his complaint in its letter dated 8 January 2025. So, 8 January 2025 is the date which is relevant when considering the time limits set out in our Rules. I’ll comment further below about what Phoenix offered to do, in its letter dated 30 April 2025, because it acknowledged it had not responded to Mr B’s complaint in a timely manner. The Rules which apply to our service are set out in the Financial Conduct Authority (FCA) Handbook in the Dispute Resolution (DISP) chapter. DISP 2.8.2R provides as follows: “The Ombudsman cannot consider a complaint if the complainant refers it to the Financial Ombudsman Service: (1) More than six months after the date on which the respondent sent the complainant its final response..” The Rules further state that this time limit applies unless, in the view of the Ombudsman the failure to comply with the time limits in DISP 2.8.2R are as a result of exceptional circumstances or the respondent has consented to the Ombudsman considering the complaint where the time limits in DISP 2.8.2 have expired. Under our Rules Mr B had until 8 July 2025 to refer his complaint to our service if he remained dissatisfied. He referred his complaint to our service in September 2025 – which was outside of the six month period referred to in our Rules. Phoenix has not consented to our service considering the issues dealt with in its First FRL and Mr B has not made us aware that his failure to refer his complaint to our service within the time limits was as a result of exceptional circumstances. So, I cannot consider his complaint about Phoenix’s refusal to pay him a tax-free lump sum or its refusal to permit him to take his whole fund as a taxed lump sum. The Second FRL Mr B raised further issues with Phoenix and it sent its Second FRL on 27 October 2025. Mr B was dissatisfied with this response and he has referred his complaint to our service within six months of the date of the Second FRL. So, I can consider any issues which were dealt with in the Second FRL which hadn’t already been dealt with in the First FRL. Mr B submitted the completed claim forms to commence his pension in October 2025, and his pension commenced later that month. However, Phoenix refused to backdate his

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pension to his NRD – which was twelve months earlier. Mr B said he’d delayed applying for his pension because he was concerned that he’d been provided with incorrect information about what he was entitled to receive and he only signed the forms, in the end, under duress. He said he’d received poor service. Phoenix addressed this part of Mr B’s complaint in its Second FRL. It said it could not backdate his request for his annuity payments because it hadn’t received the request until October 2025. I’ve thought about what Mr B has said here. And although I can understand that he believed he may have been entitled to take his pension, other than by way of an annuity, Phoenix had explained to him in January 2025 and again in April 2025, why that wasn’t possible. It was his choice not to claim the benefits he was entitled to receive at that time. He didn’t submit his claim until October 2025 which was some considerable time later. Phoenix has provided a copy of the quotation it sent Mr B in August 2024. I’ve noted that it included the following statement: “Please note that although this pack contains information on all possible retirement options the guaranteed minimum pension included in this plan may restrict the options actually available to you when you reach the pension date stated in this pack. Please however be assured that the full annuity option under this plan will be available at this pension date..” Under the heading “Retirement Options Statement” there was a table setting out the options available. This included leaving the pension savings until age 75 – and possibly later or taking a guaranteed income for life (an annuity). It stated that there was no option to take the pension in one go or as a number of lump sums. And a tax-free lump sum was not available with the annuity option. Under the heading “Your retirement countdown” it stated that Phoenix would pay Mr B his benefits at his NRD if he choose to take them at this time. Under the heading “What if Phoenix Life do not hear from me” it stated: “If we do not hear anything by the retirement date used in the enclosed annuity illustrations, we will assume that retirement benefits are not to be taken at this time. We will contact you around 6 months before your 70th birthday if benefits have not been taken by then…” The quotation also set out various things that Mr B should think about if he decided to postpone taking his pension at that time. The letter included several “action boxes” which explained what Mr B should do if he wanted to buy an annuity from Phoenix or from another provider. There was also an action box informing him what he should do if he wanted to delay taking his benefits. Phoenix sent a further quotation to Mr B on 29 November 2024. It repeated the same information as the quotation sent in August 2024. Although the estimated plan value had increased, there was no change to the GMP quoted. In the letter Phoenix said it would pay Mr B his benefits from the end of November 2024 – if he choose to take them at that time. It did not indicate that the benefits would be backdated to his NRD. Mr B did not request that Phoenix should commence his annuity after receiving either of these illustrations. He requested a further illustration in or about August 2025. This was sent

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to him on 21 August 2025 and was addressed to the address held on Phoenix’s records. Mr B phoned again on 12 September 2025. It appears he hadn’t received the illustration sent in August 2025. It was then that he enquired if the annuity could be backdated to his NRD. Phoenix sent him a quotation to commence his benefits together with the claim forms. It explained it was unable to backdate his benefits to his NRD Having considered everything, I’m persuaded, on balance, Phoenix provided Mr B with enough information in 2024 to enable him to make an informed decision about whether to claim his pension annuity so that it would commence at his NRD. He was also made aware of the consequences of delaying that decision. So, I don’t think it’s fair or reasonable to expect Phoenix to backdate his annuity to his NRD. I’ve also looked at how long it took Phoenix to process his annuity request, after it received the completed forms and its other requirements. Phoenix sent Mr B an updated illustration on 21 August 2025. Mr B contacted Phoenix on 12 September 2025 since it appeared he hadn’t received the updated illustration. It was at this time that he enquired about backdating his pension to his NRD. Phoenix then sent him a quotation to commence his benefits, together with the claim form, dated 16 September 2025 – which was two working days later. It said it could not backdate his pension to his NRD. Mr B signed the forms on 4 October 2025, and Phoenix’s records show that it received the completed forms on 16 October 2025. Mr B’s benefits commenced on 27 October 2025, and Phoenix backdated this to 16 September 2025. Having considered the timeline here, I’m not persuaded, on balance, there was any unreasonable delay by Phoenix or that it acted unfairly or unreasonably in the way that it processed Mr B’s request to take his benefits. Complaint-handling Mr B has raised concerns about how Phoenix handled his complaints. He’s referred to its failure to respond to his complaint within the 8 week period set out in our Rules, and he’s also referred to the fact that Phoenix closed a complaint he made on 12 September 2025 without investigating it. Phoenix has paid Mr B £100, in April 2025, for its delay in handling his complaint. And it reopened the complaint made on 12 September 2025 and issued its final response letter on 27 October 2025. Phoenix has also confirmed that the way it handled the complaint made on 12 September 2025 did not delay Mr B’s retirement. I have noted above that the updated retirement quotations were issued to him on 16 September 2025. Under the Rules which apply to our service, we cannot investigate a complaint or any part of a complaint which relates solely to how a business has handled a complaint. That’s because complaint handling is not a regulated activity. So, I don’t intend to comment further on what Mr B has said about how Phoenix handled his complaints, or the compensation Phoenix paid him regarding how it handled his complaints. Poor Service Mr B has complained about poor service he received. He’s referred to Phoenix’s failure to call him back on a number of occasions. Phoenix has acknowledged that Mr B had raised concerns about not being called back on two occasions – in June 2025 and again in October 2025.

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I’ve noted that Phoenix has apologised for not calling Mr B back and it has paid him £100 (plus £10 for his telephone costs) by way of compensation. I’ve also noted that a supervisor did speak to him on both occasions after he complained about not having received a call back. Mr B has also referred to not having received correspondence Phoenix said it sent to him. However, I don’t think it’s fair or reasonable to hold Phoenix responsible for this when it says it correctly addressed all correspondence to him and I haven’t been provided with any evidence to the contrary. I know that Mr B doesn’t think that £100 is sufficient compensation for the poor service he received but having regard to everything including our guidelines for awards of this nature, I’ve decided that £100, plus £10 for telephone costs, is fair and reasonable compensation for the distress and inconvenience Mr B experienced as a result of what happened here. I don’t require Phoenix to have to do anything further. My final decision For the reasons set out above I do not uphold this complaint about Phoenix Life Limited. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 23 April 2026. Irene Martin Ombudsman

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