Phoenix Life Limited trading as Standard Life · DRN-6246434

The complaint Mr S complains that Phoenix Life Limited trading as Standard Life (Standard Life) provided him with inaccurate information about his retirement benefit options under his s32 buyout policy (the plan). He wants Standard Life to facilitate the options it said were available to him. What happened Mr S’s plan started in 2000 with a retirement date in June 2026. Around 20 years ago he emigrated from the UK and is tax resident in Australia. He updated his details with Standard Life, and it sent annual statements to his home in Australia by post. These statements provided a valuation of the plan, details of the investments held and illustrations of possible benefits at the selected retirement date through purchasing an annuity and referred to flexible income options like income drawdown and lump sum payment. Mr S says because of this information he was content to leave his funds invested with Standard Life. He says his intention was to take his benefits under income drawdown aiming to deplete his fund value of around £80,000 over six or seven years, which would be taxable as foreign income in Australia at the rate of 16%. Mr S says he called Standard Life in June 2025 to set this in motion and was told that as he was resident in Australia the income drawdown option wasn’t available. Instead, he could transfer to another pension plan or take the whole fund in one lump sum payment. Mr S says taking a lump sum would incur tax at 46%, meaning much more tax overall would be paid compared to drawing the fund over several years. Mr S raised a complaint, but Standard Life didn’t uphold it. It said the plan was designed for UK customers and had itself never facilitated income drawdown. But it said for UK customers it allowed a transfer to be made to a personal pension plan (PPP) that could offer drawdown. But since 2018 this option hadn’t been available to customers not resident in the UK. It said this was because it didn’t have the regulatory permissions to sell its PPP product in the European Economic Area (EEA) and it didn’t know the regulatory requirements for countries outside the EEA. It said it no longer offered annuities to non-UK residents for the same reasons and it suggested Mr S take independent advice about his options. Mr S referred his complaint to our service; he said Standard Life should either allow him to take his benefits under income drawdown or pay the additional tax liability he would incur in taking the full value as a single lump sum payment. Our investigator looked into the complaint and said it should be upheld in part. Our investigator said the statements it sent to Mr S had referred to various retirement benefit options without clarifying these weren’t available to non-UK residents. Standard Life acknowledged this but said the statements contained generic rather than specific information and that pension legislation was subject to change over time. It said it was preferable to clarify what options were available when the customer wanted to access their benefits, taking into account their specific circumstances. It said it had information for customers living overseas on its website and the statements had confirmed that it might be necessary to transfer the plan to another pension provider to obtain the option wanted.

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Our investigator said there was no obligation under Mr S’s s32 plan for Standard Life to provide income drawdown. And despite facilitating this previously via an internal transfer to a new product it was within its rights to decline this for customers who weren’t UK resident. But she said due to the information in the statements not being qualified, even though it was aware Mr S was resident in Australia, this had been misleading and led to a loss of expectation. So, whilst she couldn’t tell Standard Life to offer Mr S income drawdown or pay any tax liabilities for him, she said it was fair that it should pay him £250 in compensation for the inconvenience caused. Mr S didn’t agree. He said he appreciated the proposed compensation, but this was a small sum compared to the potential tax liabilities. Which he said would total around $9,000 Australian dollars under staged income drawdown compared to around $47,500 as a single lump sum. He said he’d made enquiries, and no UK pension provider would allow him to transfer to them unless he had a UK address and bank account, which he didn’t. He said the information sent to him wasn’t generic, and was an account statement showing options specifically costed for him. He said Standard life should be fined for providing misleading information. And he said the latest statement it had sent to him had now had all the previous benefit options removed and was an admission it had been in the wrong before. Standard Life also didn’t agree. It said the information on the statements was standardised and based on assumptions, and like all pension providers it followed the rules set by the Financial Reporting Council around this. It said any benefits shown at retirement were only estimates on standard assumptions and weren’t guaranteed, which it was required to set out to give a “general indication of the options a policyholder might want to consider at retirement.” It said similar complaints that had been referred to our service before, hadn’t been upheld, that Standard Life’s approach was reasonable, and that statements were generic documents providing general information and weren’t a guarantee it would facilitate what the customer wanted to do. It said it wasn’t preventing Mr S from accessing his benefits or transferring his plan if he wanted to. Our investigator said our service considered each complaint on its individual merits, and Standard Life had repeatedly sent statements to Mr S stating he could access benefits by drawdown and provided specific forecasts for him. And by not confirming these options weren’t available to Mr S as an overseas customer, it had misled him. She said whilst our service couldn’t make Standard Life offer Mr S income drawdown, we could award compensation. As neither Mr S nor Standard Life agree, it has come to me to decide. My provisional decision I issued my provision decision on; 24 February 2026, I explained the reasons why I was not planning to uphold the complaint. I said: I’ve carefully considered all the points made by both Mr S and Standard Life and I understand that my provision decision will disappoint Mr S. But at this stage I don’t think it has treated him unfairly and it isn’t reasonable to say it has misled him. I’ll explain why I think that. As noted by our investigator the Terms and Conditions of the s32 plan Mr S has with Standard Life doesn’t provide for income drawdown. It wasn’t an option for that type of plan when Mr S took it out. And as UK pension legislation changed (both frequently and significantly) in the intervening years, there was no requirement for pension providers to add new options like flexible income to existing plans. So, there is no contractual requirement for Standard Life to provide Mr S with an income drawdown option, and that is an important

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factor in my decision. Instead, like most providers of older plans like this, Standard Life facilitates transfer to a modern plan that can provide income drawdown and/or allows the plan to be encashed as a lump sum. And both those options are available here, although come with practical difficulties for Mr S. Like any organisation Standard Life is free to choose what type of business it wants to undertake and that isn’t unreasonable. It also isn’t unreasonable that it has decided it can’t arrange new plans for customers who are no longer UK resident. Standard Life is a UK business and international financial service regulation, and taxation considerations are complex areas. That’s evident because as Mr S has said, few if any, UK pension providers are now able to transact new business for non-UK residents. Presumably concluding that the regulatory costs and risks of inadvertently breaking the law, either in the UK or the person’s country of residence, outweigh the business case. Providers located in the international financial centres might be able to do so, and I understand it could be possible to transfer the plan to certain types of Australian pension plan. Although as Mr S is probably aware, this is a complex area, with its own tax considerations. I understand that is inconvenient for Mr S, but it isn’t reasonable to blame Standard Life for that, given it was his decision to emigrate from the UK. It is also relevant that UK pension rules prevented Mr S from accessing his pension either from any UK based plan or any overseas plan (that HMRC would allow a transfer to be made to without tax penalties) before age 55 at the earliest. Mr S wasn’t 55 until July 2021, so around three years after Standard Life decided it couldn’t provide new products for non-UK residents. So, even if it had specifically confirmed this change sooner, Mr S would have been in the same situation he is now. In terms of the statements, I understand Mr S’s points, but I think these are a mixture of generic and specific information. But the specific information relates only to the current value and investment holdings of the plan. The other figures and projections are just estimates of the default option in the UK (annuity purchase) on one basis (when many underlying options exist for annuities alone), and this is caveated as not being guaranteed. Under the section about other options like income drawdown, it does say “You can choose” these, but it also clearly states “You may need to transfer to another product to get your chosen option”. And nowhere does it say that any of the options will be available from Standard Life. I appreciate that Mr S might consider this to be semantics. But I think this is relevant, as not all pension providers offer all the benefit options available under UK pension legislation, and there is no requirement for them to do so. The statements do also contain prompts for Mr S to take financial advice, to visit its website for further information and to review things in good time. So, whilst I understand the frustration caused in finding out the option he wanted couldn’t be facilitated by Standard Life would be considerable, I don’t think it has treated him unfairly. And even if it had provided specific details of its change of business practice sooner in this case, I don’t think it would have changed the outcome. That means I don’t think it is reasonable to say Standard Life has caused a loss of expectation which it should pay compensation for. And for that reason, I don’t propose to uphold this complaint. I asked both parties to send me any further information or comments they would like me to consider. Response to provisional decision Mr S said he didn’t accept my provisional decision. Standard Life said it agreed with my provisional decision.

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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. Having done so, I’ve decided not to uphold the complaint. As set out in my provisional decision the original contract Mr S took out never provided for the benefit profile he would now like to use. Standard Life is a UK based pension provider, serving the needs of UK based customers. International tax laws and financial services regulations are complex areas for UK based pension providers and became more so after the UK left the European Union. It isn’t unreasonable for Standard Life to have decided it can’t offer new products to customers now resident overseas. And without the appropriate regulatory permissions it would be breaking the law if it did. As Mr S is aware, most UK providers have adopted the same approach. And Standard Life is prepared to pay Mr S his benefits, just not in the tax efficient format he desires. So, Standard Life isn’t acting unfairly here. And, as I explained Mr S couldn’t have transferred his plan and then accessed benefits before age 55 (in 2021) without incurring potentially significant tax penalties in the UK. So, even if Standard Life had specifically informed him about its change in policy in 2018, the position would likely be the same as it is now, in that he would need to transfer his plan to access benefits as he now wants. It may be possible to transfer the plan to an overseas pension provider and achieve a superior outcome. As I don’t think Standard Life has treated Mr S unfairly, I can’t uphold his complaint. My final decision For the reasons I’ve given above and in my provisional decision, my final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr S to accept or reject my decision before 22 April 2026. Nigel Bracken Ombudsman

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