Prudential Assurance Company Limited · DRN-6063208

The complaint Mr M complains that Prudential Assurance Company Limited (‘Prudential’) won’t allow him to move his Retirement Account to an alternative provider. What happened Mr M holds a Retirement Account pension plan with Prudential that is in drawdown. One of the investments held in the pension is the Woodford Equity fund (‘Woodford’). Mr M is unhappy with the service and administration provided by Prudential so he’d like to transfer his pension to another provider. Prudential say this isn’t possible because the Woodford fund can’t be moved. Mr M complained to Prudential about this but his complaint wasn’t upheld so he referred the matter to our Service for consideration. One of our Investigators reviewed the complaint but didn’t think Prudential had done anything wrong in not allowing the transfer. Mr M didn’t accept the Investigator’s opinion and has requested that the matter is considered by an ombudsman. In summary Mr M has said: • The Woodford fund represents only 1% of his pension fund value and it’s unreasonable and unfair he’s not able to transfer. • His financial adviser has been in touch with Prudential to discuss other options such as allowing am in-specie transfer of the Woodford investment or Prudential buying out the suspended fund. However Prudential will not allow either option as it says it can’t sell or move the units in this fund. Mr M believes other providers will allow these options in certain circumstances but Prudential shows no flexibility. The complaint has been passed to me to reach a final decision. 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 reached the same conclusion as the investigator and for broadly the same reasons. It’s my role to fairly and reasonably decide if the respondent business (in this case Prudential) has done anything wrong in respect of the individual circumstances of the complaint made and – if I find that the business has done something wrong – award appropriate redress for any material loss or distress and inconvenience suffered by the complainant as a result of this.

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When considering what is fair and reasonable in the circumstances, I need to take account of relevant law and regulations, regulator’s rules, guidance and standards, codes of practice and, where appropriate, what I consider to have been good industry practice at the relevant time. Mr M is understandably unhappy with the position he is in. I can appreciate that having a pension holding an illiquid asset that doesn’t benefit him and not being able to transfer his fund to another provider must be frustrating. I should begin by explaining that, under HM Revenue & Customs (‘HMRC’) rules, a partial transfer of a crystallised SIPP isn’t possible. If the benefits have been designated to drawdown, the whole of the fund under the arrangement must be transferred in a single tranche. HMRC rules are not something Prudential has the power to override so it’s not unreasonable it won’t allow a partial transfer. And because of the favourable tax treatment of pensions and investments/assets held therein, there are strict rules around the disposal and/or removal of investments/assets from a pension – and, if a business’ or individual’s actions are found to be in breach of those rules there are significant consequences, for example HMRC sanctions may apply and the individual may face an unauthorised payment charge. Generally speaking, in-specie transfers aside, assets need to be sold on arm’s length terms or given a nil value and surrendered. There has to be a reasonable basis on which to do the latter. When it comes to Woodford, the circumstances present a challenge to going down either of these routes because the asset is technically active and is generating an income – or is expected to generate income - by way of distributions being paid out by the Woodford Settlement Scheme. So while I appreciate Mr M believes Prudential should purchase his Woodford investment, I don’t think it’s unreasonable that it hasn’t done this. And in any event Prudential didn’t advise Mr M to purchase the Woodford investment, so even if it was possible to purchase it, I wouldn’t ask Prudential to do this as I don’t think its at fault for the position Mr M finds himself in. Can Woodford be transferred to a new provider in-specie? Prudential has confirmed in-specie transfers are not a feature of the Retirement Account; its systems, processes, and terms and conditions for the Retirement Account product do not allow an in-specie transfer. So it’s unable to arrange for the Woodford fund to be transferred in-specie. I therefore can’t direct Prudential to allow an in-specie transfer when it’s simply not an option with the type of account Mr M holds. I should also add that it’s my understanding that the costs involved in arranging an in-specie transfer can be considerably more than those involved with a cash transfer. This is due to the amount of work involved in the in-specie transfer, especially when the investment is illiquid, as it is in the case of Woodford. This means it’s not always economically viable to transfer an investment in-specie. And not all SIPP providers will accept an in-specie transfer of an illiquid investment in any event. I do appreciate that Mr M would like to move his pension away from Prudential but until the Woodford investment has been closed - which is something Prudential has no control over - this won’t be possible. So having carefully considered the issues in this complaint, I’m not persuaded these arise from a failing on Prudential’s part.

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I understand that this will likely come as a significant disappointment to Mr M, I’m sure he feels strongly about the issues he has raised. However, I’m not upholding the complaint. This is not a reflection of the seriousness of the issues Mr M complains about or the impact of the situation surrounding his pension – but, rather, that I’m not persuaded that what’s gone wrong here is because of a failing on Prudential’s part. My final decision For the reasons explained, I’m not upholding this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr M to accept or reject my decision before 26 May 2026. Lorna Goulding Ombudsman

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