DRN-6211650

The complaint Mrs B’s estate complains about Rothesay Life Plc trading as Rothesay. It disagrees with Rothesay’s request for it to return an annuity payment made after Mrs B passed away. What happened Although I’ve considered everything the parties have provided in this case, I won’t detail every event or communication here. This simply reflects the informal nature of our Service. I’ll summarise what happened, including the main arguments, and focus on giving the reasons for my decision. 2011: Mrs B selected and purchased an annuity with another provider on the following basis: • Single life only. • Frequency of pension – yearly in arrears from the retirement date. • Guarantee – None. • Annual payment – £3,558.65. 2017: Along with others, Mrs B’s annuity was transferred to Rothesay. 4 March 2025: Mrs B sadly passed away. 6 March 2025: Rothesay paid Mrs B’s annual annuity into her nominated account. 17 March 2025: Mrs B’s husband, Mr B, notified Rothesay of Mrs B’s death. 18 March 2025: Rothesay wrote to Mr B, confirming that although Mrs B’s regular annuity payments had been stopped, it was possible that it had already issued a payment for the period after her death. Rothesay said it would let Mr B know if any overpayments like this had been made and, in the meantime, asked him to complete its Executor Information form and provide the details of the executors of Mrs B’s estate. Mr B completed Rothesay’s Executor Information form, in which he named his two daughters as the executors of Mrs B’s estate. 27 March 2025: Rothesay received Mr B’s completed Executor Information form. 28 March 2025: Rothesay wrote to one of Mrs B’s daughters (“Mrs T”), confirming that there were no remaining benefits due under Mrs B’s annuity. It confirmed there’d been an overpayment of £3,558.65 into Mrs B’s account during the 7 March 2024 to 6 March 2025 period after her death, which it said Mrs B’s estate would need to return to it. Details of how this could be done were provided. 28 April 2025: Having received no response, Rothesay wrote to Mrs T again, asking for the overpayment to be returned by Mrs B’s estate.

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15 May 2025: Having been made aware of Rothesay’s letters to Mrs T, Mr B wrote to it saying that as Mrs B’s annuity had been paid in arrears annually and not in advance, the payment it made in March 2025 wasn’t an overpayment and therefore shouldn’t need to be repaid in its entirety. He added that Rothesay’s request was insensitive given the circumstances and said the alleged overpayment had been used to cover Mrs B’s funeral expenses. 20 May 2025: Rothesay issued a final response and explained that although Mrs B’s annuity was paid annually in advance, there was no provision for a ‘proportional’ final payment. It said a policy paid in arrears with a proportional final payment provided a final payment after the policyholder died to cover the period since their last payment, whereas policyholders who chose a policy without a final payment on death, received a higher income throughout their life. Rothesay said that as Mrs B’s last annuity payment was due on 6 March 2025, after she passed away, and there was no provision for a final payment under her annuity, her estate wasn’t entitled to retain the 6 March 2025 payment. 20 August 2025: Rothesay wrote to Mrs T again, reminding her that it was waiting for Mrs B’s estate to return the overpayment made to Mrs B’s account following her death. Mr B responded to Rothesay saying that his daughter, Mrs T, was still mourning the loss of her mother, all letters regarding the overpayment should be sent to him. 17 September 2025: Rothesay issued a final response. In summary, it said that as the overpayment was due back from Mrs B’s estate, its normal process was to contact the named executor of the estate to request its return. In this case this happened to be Mrs B’s daughter, Mrs T, whose details had been given as the first named executor on the Executor Information form Mr B completed. Although it hadn’t done anything wrong by following its normal process, Rothesay apologised for any unintended distress caused. Unhappy with Rothesay’s response, Mr B asked our Service to consider the matter. One of our Investigators considered the complaint and didn’t uphold in. In summary, she said: • As Mrs B’s annuity didn’t include provision for a proportional payment upon death, it ended and all payments ceased when Mrs B passed away on 4 March 2025. So, the payment on 6 March 2025, after Mrs B passed away, was an overpayment. And Rothesay hadn’t made an error when it asked for the funds to be returned. • Rothesay had offered assistance and invited Mrs B’s estate to discuss a repayment plan for the return of the overpayment if this was required which she considered fair. • While she understood Mr B was unhappy with Rothesay requesting the overpayment from Mrs T, this wasn’t unreasonable action to take as she was one of the named executors of Mrs B’s estate. Mr B disagreed and, in brief, made the following comments: • He disagreed that Mrs B’s estate should have to repay the annuity payment made to Mrs B on 6 March 2025. • He was heartbroken after losing Mrs B and had enough to deal with without having to worry about repaying money he didn’t have. • He needed a clear way to move forward from what happened. As no agreement could be reached, the complaint was passed to me for a 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’m afraid I won’t be upholding it. I’ll explain why. But before I do, I should emphasise that while I’ve taken note of the arguments made by both parties, I’ve limited my response to the issues I consider to be central to this complaint. That’s to say: • Whether Mrs B selected an annuity which included provision for any payment following her death. • Whether the payment Rothesay made to Mrs B’s account after she passed away was an overpayment or funds her estate was entitled to. • Whether Rothesay’s requests for the return of the payment it made after Mrs B passed away was reasonable. Although this complaint is brought by Mrs B’s estate, I’m mindful that those representing its interests are Mr and Mrs B’s daughters. And it’s Mrs B’s husband who is acting on behalf of his daughters – and therefore the estate – in bringing this complaint. So, I’d like to say that Mr B and his daughters have my sympathy given the circumstances. I have no doubt that losing Mrs B has been very hard to process, and that matters relating to this complaint won’t have been easy to deal with alongside that. Mrs B’s annuity Mr B is adamant that due to Mrs B’s annuity being set up to be paid yearly in arrears, Mrs B’s estate shouldn’t have to return the full annuity payment Rothesay made after Mrs B died. Rothesay disagrees. So, the key issue here is whether, under the terms of Mrs B’s annuity, Rothesay was required to make any further payments – prorated or otherwise – after Mrs B passed away, which her estate would be entitled to. Looking at the paperwork Mrs B signed in 2011; I’m satisfied that the annuity she selected didn’t include any provision or guarantee which would result in further payments being made after she died. The fact that her annuity was paid yearly in arrears didn’t alter that. As I understand it, Mr B believes that as the payment Rothesay made on 6 March 2025 covered Mrs B’s annuity payment period for the year prior (7 March 2024 to 6 March 2025), her estate is entitled to those funds. Although I can see how Mr B has reached this conclusion, the available evidence hasn’t persuaded me that this is the case. As I’ve said, based on the annuity Mrs B selected, any entitlement she had to payments stopped the day she passed away. This isn’t unusual. It’s worth noting that policyholders who choose annuities without a final payment on death tend to receive a higher income during their lifetime. The 6 March 2025 annuity payment Although Rothesay’s 6 March 2025 annuity payment was made after Mrs B passed away, it was issued on the assumption that she was alive. If Rothesay had been aware that Mrs B had died, and there’d been sufficient time to stop the annuity payment being made automatically, I’m satisfied that under the terms of the annuity Mrs B agreed to it wouldn’t have been made. As it stands, there were only two days between Mrs B passing and the 6 March 2025 annuity payment being made. So, I don’t think there was enough time for Rothesay to stop the

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March 2025 annuity payment. I note that it only became aware of Mrs B’s death 11 days after it made the payment. It’s unfortunate the March 2025 annuity payment was made when it was, as believing that it was something Mrs B and therefore her estate were due, Mr B used the funds to cover funeral costs. I don’t doubt the sincerity with which Mr B took this action, but it doesn’t alter the fact that the payment wasn’t one Mrs B’s estate was entitled to after she died. Because of this, I haven’t found that Rothesay incorrectly determined that the March 2025 payment was an overpayment or that its requests for the funds to be returned were unreasonable. Moving forward Given that Mrs T had lost her mother, I can understand why Mr B felt Rothesay’s requests for the return of the overpayment from her were inappropriate. However, Mr B confirmed with Rothesay that Mrs T was one of the executors of Mrs B’s estate. And as the overpayment fell within the estate, the executors (including Ms T) were responsible for arranging its return. Rothesay was writing to Mrs T in this capacity. I’ve reviewed Rothesay’s letters to Mrs T requesting the return of the overpayment, but I haven’t found anything in the content or tone which was inappropriate. It recognised the impact of Mrs B’s death and offered relevant support. It also invited Mrs T to contact it if Mrs B’s estate wanted to arrange a different method for repaying the funds. I’m sorry to hear that the prospect of returning the overpayment is worrying Mr B, but this is one of the reasons why it’s important for Mrs B’s estate to engage with Rothesay so it can understand its position and agree an appropriate way to return the funds. Rothesay, the same as any other pension provider in its position, must provide benefits in line with the terms of Mrs B’s annuity contract. Paying more could attract the attention of HMRC under its unauthorised payment legislation. Gov.Uk says the following about unauthorised payments: “What is an unauthorised payment? The tax rules specify the conditions that need to be met for payments to be authorised. Any payment that does not meet these conditions is an unauthorised payment. Common examples of situations where payments are classed as unauthorised include: (…) • continued payments of pension after the member’s death (…)” Payments made after the member’s death is the second of several examples provided on its website. And I think for Rothesay to pay an annuity payment from a pension to Mrs B when she had at the point already passed away would likely meet this criteria. It’s worth noting that unauthorised payments can come with sanctions to both the provider and the recipient. I haven’t based my decision on this as I don’t think Rothesay did anything wrong given the circumstances, however had it made the March 2025 annuity payment after notification of Mrs B’s passing, I think it would likely have been treated as an unauthorised payment. In conclusion, while I very much sympathise with Mrs B’s daughters and Mr B’s arguments, I can only direct Rothesay to do something if I felt it was fair and reasonable to say it made an error and caused a loss. But having considered everything carefully, I don’t think it acted unfairly or unreasonably.

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My final decision For the reasons explained I do not uphold this complaint and make no award. Under the rules of the Financial Ombudsman Service, I’m required to ask the estate of Mrs B to accept or reject my decision before 25 May 2026. Chillel Bailey Ombudsman

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