AJ Bell Management Limited · DRN-6211911

The complaint Mr I complains that AJ Bell Management Limited trading as AJ Bell (AJ Bell) misinformed him about the tax treatment of his Self-Invested Pension Plan (SIPP) once tax-free cash (TFC) was taken, and he wouldn’t have proceeded with this otherwise. He says this will result in losses of around £24,000 and he wants compensation for this. What happened Mr I had already taken some benefits from his SIPP with AJ Bell. In October 2025 he contacted it to advise he wouldn’t require any further ad hoc withdrawals in the foreseeable future as his State pension was about to start. AJ Bell said he could send a secure message to confirm this. The next day Mr I called AJ Bell again to enquire about the process of taking his TFC from his plan as he was anxious to avoid income tax liabilities on any withdrawal. The call handler briefly explained the process and difference between uncrystallised (benefits not yet taken) and crystallised (some benefits taken) pension funds and said Mr I could place any instructions himself through the AJ Bell App or website. A further call was made on 4 October 2025 around the process to take TFC through AJ Bell’s self-serve system. On 6 October 2025 Mr I called again and asked if he took all his TFC whether the residual fund entering drawdown would accrue further TFC in future. It isn’t disputed that the call handler mis-answered Mr I’s question by confirming the total amount of TFC that could be paid was £268,275, which is the overall maximum generally allowed under HMRC rules. On 8 October 2025 Mr I placed instructions on AJ Bell’s APP to withdraw the maximum available TFC. On 9 October 2025 AJ Bell confirmed receipt of this request and raised a query about pension benefits Mr I had taken previously as the information he’d provided didn’t match its records. Several calls followed, with Mr I pressing for payment of his TFC, which he said was “quite important” to him. His TFC payment of £31,600.63 was made on 20 October 2025, inside AJ Bell’s service standard. During a call on 20 October 2025, Mr I also asked whether his residual drawdown fund could provider further TFC in future and it was confirmed that it could not. Mr I subsequently raised a complaint that he’d been misinformed about the future tax treatment of his crystallised pension benefits. And but for this he wouldn’t have taken his TFC at that time, instead leaving his whole fund invested. He calculated that his fund could be expected to broadly double over the next 10 years meaning around £24,000 in additional TFC would have been available. AJ Bell didn’t accept the complaint. It said the call handler had misunderstood Mr I’s initial query around the tax treatment, but the Terms and Conditions of the SIPP and the key features document provided to Mr I had confirmed the correct tax treatment. But it offered him £100 compensation for the misunderstanding. Mr I referred his complaint to our service and our investigator looked into it, but he didn’t uphold it. Our investigator said AJ Bell accepted it’s call handler had misunderstood Mr I’s question about the future tax position. But he said that the goodwill payment of £100 offered by AJ Bell for this was more than was warranted in the circumstances. Our investigator said the

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evidence from the other calls Mr I had made was that it was always his intention to take his TFC and the misinformation given on 6 October 2025 wouldn’t have changed this. He said AJ Bell’s terms and conditions confirmed the correct legislative position and no further TFC entitlement would accrue once benefits had been crystallised. And because this was never a possibility it wasn’t appropriate to say Mr I had the losses he suggested. Mr I didn’t agree. He said it was clear from the telephone calls he’d been misinformed, and our investigator should listen to the calls again. He disputed that he’d fully decided to take his TFC before the call on 6 October 2025, when he’d sought further information. Our investigator said he had listened to the calls and felt there had been a misunderstanding as Mr I and the call handler had, at times, spoken over each other. And in his view the call handler hadn’t answered the specific question asked by Mr I. He said the prior calls did indicate Mr I had decided to take his TFC. And he said the terms and conditions of the SIPP, setting out the legislative position were available to view on AJ Bell’s website. Mr I still disagreed. He said, he had no recollection of being provided with any terms and conditions. As Mr I doesn’t agree it has come 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. Having done so, I’m not upholding the complaint. I know my decision will disappoint Mr I, but whilst I agree he was provided with unclear information on the call of 6 October 2025, I don’t think it is reasonable to conclude he would have acted differently but for this. I think in the circumstances he should have been reasonably aware of the position given that he had already been taking benefits from his SIPP for some years. And Mr I was given correct information when he called on 2 October 2025. It is also an important consideration that AJ Bell wasn’t providing Mr I with advice, it only administered his plan. I asked both Mr I and AJ Bell for some further evidence about what had happened. I asked Mr I why he had drawn the TFC, because on a number of occasions he had chased for prompt payment stating this was important to him. I also asked AJ Bell how it’s terms and conditions would have been provided to and accepted by Mr and, whether an illustration would have been generated when he submitted the TFC payment request. Mr I said he’d seen media reports that there might be adverse changes to the availability of TFC in future and he’d “wanted to take the tax free cash out asap”, some of which he used to purchase a car. AJ Bell provided screenshots from its system showing what Mr I would have completed to request his TFC payment. This included a declaration page where Mr I confirmed he had read and understood AJ Bell’s guide to “SIPP Withdrawals & Accessing Your Pension” which was linked. This included an overview of the tax position and further links to a document called “How is my pension taxed on withdrawal”, which said the following; “Can I take some of my pension tax free? Yes, you can normally take 25% of your pension tax free, subject to a lump sum allowance of £268,275 for most people.

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How much tax will I pay on my pension? As above, you can usually take 25% of your pension tax free. The rest that you withdraw (whether as income or a lump sum) will be taxed in the same way as income you earn from working. That means how much tax you pay depends on how much you withdraw. Taking a large sum of money from your pension could push you into a higher-rate tax band, meaning you pay a lot more tax than you had planned.” I think this clearly sets out the tax position and that there is no further TFC once benefits have been taken. As Mr I had previously taken benefits from his SIPP he would have also previously confirmed that he had read, understood and accepted AJ Bell’s guide. AJ Bell also confirmed when Mr I opened the “Youinvest” account, having terminated the relationship with his IFA, that he’d read, understood and accepted the terms and conditions. These state that benefits would only be paid within “Scheme Rules”. Which set out that any pensions paid, including those under income withdrawal, will be subject to deduction of tax. So, Mr I confirmed he’d read, understood and accepted documents in submitting the TFC payment request. None of these document’s state that further TFC will accrue, which would be an attractive feature if available and one likely to feature prominently in pension providers marketing material. So, this clearly contradicted what Mr I says he understood from the call made on 6 October 2025, which was also different from the information he was provided with during the call on 2 October 2025. When I think the different tax treatment between benefits that had been accessed (or crystallised) and those that hadn’t were clearly explained to him. So, I think it’s reasonable that if Mr I was still uncertain he should have queried things further on 6 October 2025, before he proceeded. The tax treatment Mr I wanted was never available, and this was confirmed in multiple documents he’d agreed he’d read and understood before proceeding. Earlier calls with AJ Bell had provided the correct information and the answer the call handler provided on 6 October 2025 wasn’t to the question Mr I had asked. But, even had there not been this confusion, I’m not persuaded that Mr I wouldn’t have gone ahead and taken his TFC in any case, given the reasons he’s set out for wanting to take it. There had been quite wide speculation that TFC might be limited by the Government and in now saying he wouldn’t have taken it, Mr I has the benefit of hindsight that this hasn’t happened. And he’s obviously had the benefit of the use of the TFC in the meantime. Taking everything together I don’t think Mr I would have acted differently, and he was provided with the correct information on multiple occasions. So, I don’t think it is reasonable to say Mr I has suffered the potential losses he claims as a result of the answer given on the call of 6 October 2025. So, I’m not upholding this complaint, as I think the compensation already offered of £100 for the misunderstanding is fair in the circumstances and AJ Bell needn’t do any more than it has. My final 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 I to accept or reject my decision before 24 April 2026. Nigel Bracken

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Ombudsman

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