Hargreaves Lansdown Capped Drawdown SIPP (PO-11408)

Ombudsman’s Determination

Outcome

Mr R’s complaint against HL is partly upheld, but there is a part of the complaint I do not agree with. To put matters right, for the part that is upheld, HL should pay Mr R £500 for the significant distress and inconvenience that he has suffered.

My reasons for reaching this decision are explained in more detail below.

Complaint summary

Mr R has complained that HL has used the incorrect maximum income, known as the GAD, when testing the benefits in the capped drawdown policy against the Lifetime Allowance (LTA). As a result Mr R has exceeded the LTA and received a tax charge of £28,208 from his Self-Invested Personal Pension (the SIPP), also held with HL.

Mr R says that his financial loss is £28,208, plus the loss of entitlement to tax free cash from the SIPP. As, if the figure he believes is correct had been used, he would not have exceeded the LTA.