Wesleyan Assurance Society · DRN-6238033

The complaint X has complained to Wesleyan Assurance Society (Wesleyan) that it won’t allow her to enter flexi access drawdown without first receiving financial advice. X has said that it’s unnecessary and that she doesn’t want to pay the associated fees. She’s also said that it represents a small proportion of her pension assets. What happened The investigator who considered this matter set out the background to the complaint in his assessment of the case. I’m broadly setting out the same background below, with some amendments for the purposes of this decision. X contacted Wesleyan in July 2025 saying that she wished to take 25% of her personal pension as tax free cash and move the remaining funds into an income drawdown arrangement. Wesleyan responded to say that it would only proceed with this request upon receiving instructions from a financial adviser. X expressed concern at this requirement, saying that it wasn’t necessary as she’d spoken to Pension Wise and that Wesleyan should accept this and proceed on that basis. X raised a complaint and Wesleyan issued a final response letter on 21 August 2025. It didn’t uphold the complaint and explained that for the type of transaction X wished to complete, it was its policy to require the involvement of a financial adviser. Dissatisfied with the response, X referred the matter to this service. She said that Wesleyan was putting unnecessary obstacles in her way when trying to access her pension. She added that the fees for the financial advice would be 3%, which was expensive. X was of the view that Wesleyan should allow her to access her pension funds without having to obtain advice from a financial adviser. Having considered the matter, our investigator didn’t think that the complaint should be upheld, saying the following in summary: • Wesleyan was entitled to make a policy decision requiring financial advice before proceeding with certain transactions – in this case, moving into a drawdown arrangement. • A move to income drawdown involved entering into a new contract, which might differ significantly from the current arrangement which X had. • Drawdown products often carry higher charges and come with additional risks, such as the risk of withdrawing too much and running out of funds in retirement. There’s also the risk of poor investment performance, meaning that the policy holder could get back less than has been contributed.

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• By requiring the involvement of a financial adviser, Wesleyan was seeking to ensure that its customers received appropriate advice on the risks and costs involved. It also allowed Wesleyan to place responsibility for the decision with the adviser and the policy holder, which was particularly important if the drawdown product didn’t perform as expected and a complaint was raised in the future. • A pension provider has discretion over how it administers its products and requirements like these can vary. Our service can’t interfere with these decisions, and we don’t have the power to tell a business how to develop or apply its internal policies – that would be a matter for the Financial Conduct Authority (FCA). • Therefore, Wesleyan hadn’t acted unfairly or unreasonably by insisting on financial advice in this situation. • It was acknowledged that X had other retirement provisions in place, and this pension constituted only a small portion of her financial assets. And X’s ability make informed financial decisions wasn’t in doubt. However, that didn’t alter the fact that Wesleyan was entitled to apply its own policies consistently across all of its customers. • Pension Wise is a free guidance service, but it doesn’t provide recommendations on specific products or advise consumers what they should be doing with their pensions. By contrast, a financial adviser would undertake a comprehensive analysis of X’s financial situation and provide a personal recommendation. X disagreed, however, saying the following in summary: • Her main complaint was that, although Wesleyan had a policy to say that she must take its financial advice before cashing in my pension policy, this wasn’t made clear to her when she took out the pension policy. • She’d also provided evidence from Wesleyan which said that Pension Wise would be adequate advice for her to make use of. Nothing in its literature ever said that she needed to pay it for advice. Having sought further clarity from Wesleyan on the points raised, the investigator said the following: • With regard to X’s concerns that Wesleyan didn’t make it clear about the requirement to obtain financial advice when the pension plan was set up in 2006, as X was now looking to set up a new drawdown arrangement, this would generally involve moving the existing pension fund into a new product and entering a new contract. And Wesleyan was entitled to set out the basis on which it would conduct business. • So, it wasn’t unreasonable for it to set conditions for the type of business it was willing to accept, nor was this unusual amongst pension providers. Therefore, it wasn’t unfair or unreasonable for Wesleyan to require advice in situations like this. • X had also mentioned that the correspondence sent to her in July 2024 didn’t mention that she’d be required to pay for the financial advice. Wesleyan’s position was that any charges regarding the financial advice would have been discussed after X had spoken to the customer engagement centre. Wesleyan had further said that it couldn’t find any calls to suggest that X had contacted it to discuss her pension options before speaking with the adviser.

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• X was also free to shop around for a drawdown provider that didn’t require customers to take financial advice. But Wesleyan couldn’t fairly be required to allow X to take out its drawdown plan if X wasn’t willing to meet its requirement to receive financial advice. As agreement couldn’t be reached on the matter, it’s been referred to me for review. 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. And having done so, whilst I’m sorry to disappoint X, I’ve reached broadly the same conclusions as the investigator, and for similar reasons. There little in fact which I think I can meaningfully add to what’s already been said. But I’d reiterate that, by entering drawdown, X would be moving into a new arrangement, and Wesleyan is entitled to set the terms under which it’s prepared to do business with its customers. If those terms are deemed to be unsatisfactory, then a customer is of course entitled to look elsewhere. And as set out by the investigator, X would be able to transfer to another provider which might allow drawdown without the need for financial advice. It seems to be unclear as to how any confusion over whether guidance from Pension Wise would suffice has arisen, but as also set out by the investigator, Pension Wise doesn’t provide regulated financial advice, but a guidance service. But X also wouldn’t need to seek, and pay for, advice from Wesleyan if she wished to establish its drawdown contract – this could be sought from an independent financial adviser (IFA). So, overall, given the circumstances here, I can’t fairly or reasonably require Wesleyan to not insist upon financial advice before X moves into drawdown. My final decision My final decision is that I don’t uphold the complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask X to accept or reject my decision before 20 April 2026. Philip Miller Ombudsman

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