UK Pensions in dispute - December 2025

DPO expands on Hughes : Member does not have to be an "earner" for statutory transfer—CAS-78486-R9D8

The Deputy Pensions Ombudsman (DPO) has held that a member does not have to be an "earner" to have a valid statutory pension transfer.

The member in this case (Mrs T) had transferred her pension to a SSAS which was later identified as likely to be a scam scheme. Mrs T claimed that the transfer should not have gone ahead because she was not an "earner", therefore the transfer did not comply with the legislative requirements: a statutory transfer can be used to acquire "transfer credits", defined as "rights allowed to an earner under the rules of an occupational pension scheme".

In the previous case of Hughes v. Royal London the High Court proceeded on an unargued assumption that the member must be an "earner" to acquire transfer credits. On that basis, it determined that earnings could be from any source (not necessarily a scheme employer). In Mrs T’s case, the DPO said that, because the question of whether the member needed to be an earner at all was not argued in Hughes, she was able to consider that point. She found that if the rights being acquired in the receiving scheme have the character of rights which were allowed to persons who were earners, the individual applicant did not have to be themselves an earner.

Mrs T also complained that the transferring scheme should have identified a number of warning signs. In line with the recent approach from the Pensions Ombudsman (TPO), the DPO found that there was no legal duty of care to protect Mrs T from third-party frauds, to investigate her circumstances beyond statutory checks, or to issue warnings (including TPR’s "Scorpion" leaflet), beyond what legislation required at the time.

What does this ruling mean for trustees?

This is a significant development in the interpretation of the statutory requirements. It may make it easier for schemes to defend claims where a member transferred to a scam scheme, since on this basis they will no longer need to demonstrate that the member was an earner when proving that there was a statutory obligation to make the transfer. This will be less relevant for transfer cases arising after the introduction of the red and amber flag requirements.

On the due diligence point, the determination follows the recent change in approach by TPO: that schemes are not under an obligation to provide TPR’s Scorpion leaflet or follow its guidance.

Member entitled to incorrect benefits confirmed by call centre, despite disclaimers—CAS-63587-P0K4

TPO has held that where a member (Mr E) was given mistakenly inflated figures and these were confirmed through the scheme’s call centre, he was entitled to rely on those figures despite disclaimers.

Mr E had transferred his rights out of the scheme and back in again. A number of years later, his Estimate of Benefit statements (EoBs) showed a sudden increase in service. The EOBs carried a standard disclaimer that the statements were for illustration only, conferred no entitlement, and that benefits would be calculated on correct service at retirement.

When Mr E called the scheme to check the change, two call handlers expressly reassured him that the enhanced figures were correct, giving a plausible explanation that the transfer-out and reinstatement had increased his service credit. In fact, this was an error. The member stressed on the call that he did not want to rely on inaccurate figures. Subsequent statements included the mistake. The error was only identified when he came to take his pension.

TPO found that, although the statements included disclaimers, the scheme’s subsequent conduct— especially its unequivocal assurances by the call centre—meant it assumed responsibility for the accuracy of the specific statements Mr E queried. In those circumstances, it was reasonable for Mr E to rely on the confirmation despite the disclaimers.

The remedy was to put Mr E in the position he would likely have been in absent the misstatement, including differences in salary/pension on the basis that Mr E would have left his job later, and taking into account capital held in property, as he sold a house in reliance on the figures.

What does this ruling mean for trustees?

This case is a reminder not to rely solely on disclaimer language: TPO comments that they are not always a "get out of jail free card". Schemes need to be careful that information provided to members is accurate (or it is made clear where the information is provisional) and ensure that call centre staff are properly trained.

Scheme not absolved of responsibility when given fraudulent information—CAS-84909-V2W7

On the death of a member (Mr K), the scheme contacted his son (Mr C). Mr C falsely confirmed that he was the member’s only child. Relying on Mr C’s responses, the plan identified him as the sole beneficiary and paid him a lump sum. Police enquiries followed and Mr C later pleaded guilty to fraud by false representation. One of the member’s other children complained that the scheme failed to identify and consider all potential beneficiaries.

TPO upheld the complaint: while the scheme had discretion on who to distribute the benefits to, it first had to identify the range of potential beneficiaries, which is a factual question. The fact that Mr C committed fraud did not discharge the scheme from its obligation to consider the other potential beneficiaries and consider its discretion properly.

What does this ruling mean for trustees?

Where information is provided by a person who claims to be the sole beneficiary, it may be prudent to consider the possibility of fraud and the need to take extra steps.