Ombudsman rebukes Hornbuckle for 'poor service'

Hornbuckle Mitchell has been ordered to pay compensation to the estate of a client after its poor service caused a terminally ill man “distress and inconvenience”.

The deputy Pensions Ombudsman (PO) Jane Irvine (pictured) has ordered the SIPP provider to pay the estate of Richard Coleridge £750 by 8 April after it delayed paying his pension despite accepting his money into its SIPP.

Coleridge was diagnosed with multiple myeloma, a cancer of the plasma cells in bone marrow, in December 2008. The condition carries an average life expectancy of four years, and he died in October 2010.

Coleridge's adviser transferred his funds into Hornbuckle's flexible income pension plan (FIPP) in February 2009, requesting a product giving the largest scheme pension possible so Coleridge could withdraw his money in just a few years.

Hornbuckle said it needed an actuarial report to prove Coleridge's short life expectancy, and deducted fees for outsourcing this report. However, it did not obtain a report.

The provider then told Coleridge the scheme pension was being set up and paid out his lump sum in May.

Between May and October, Coleridge received no monthly pension. When inquiring about this, Hornbuckle gave him no explanation.

Internal emails at Hornbuckle, the PO says, suggest Hornbuckle spent this period attempting to work out what kind of pension it could offer Coleridge.

After a complaint in October, Hornbuckle said it understood an actuarial report would be supplied to them in order to establish a scheme pension.

Coleridge transferred his fund to Rowanmoor in December 2009, free of charge, after Hornbuckle gave him a choice of a scheme pension based on a ten year or eight year period.

The PO rules it was poor service for Hornbuckle to accept Coleridge's money and pay out a lump sum knowing it could not provide a pension he wanted without an actuary's report.

The ombudsman also says Hornbuckle failed to explain the delay to Coleridge, causing him distress and inconvenience at a "critical" time in his life.