A major pension provider has been compelled to pay thousands of pounds in compensation to savers who were locked out of their accounts following a significant IT system failure. Customers of Scottish Equitable, which operates under the Aegon brand, found themselves unable to access their retirement savings after a planned systems upgrade went awry, reportedly creating concerning gaps in their pension pots.
Seventeen-Month Ordeal for Affected Savers
The problematic IT upgrade was initiated in August 2024, and remarkably, the issue has persisted for seventeen months without being fully resolved for all customers. According to reports, Aegon has yet to address all outstanding cases, leaving some savers in a prolonged state of uncertainty regarding their retirement funds.
Regulatory Intervention and Compensation Orders
The Financial Ombudsman Service has ruled against Aegon in at least five separate workplace pension disputes within the past six months. This regulatory action has resulted in the provider being ordered to pay £2,200 in compensation to five affected customers. These rulings followed a series of complaints that were upheld, highlighting systemic issues in how the pension provider handled the situation.
In one specific case, Aegon managed to locate the "missing" funds by December 2025 and offered to conduct a loss assessment while providing £350 in compensation to the affected saver. However, this resolution came after a substantial delay that caused significant distress for those involved.
Expert Commentary on Pension Administration Failures
Pensions expert Tom McPhail offered crucial insight into the situation, stating: "With these kinds of things, the sooner you head it off, the better and the less painful it is for everybody involved." This commentary underscores the importance of prompt resolution in financial service failures, particularly when retirement savings are at stake.
Aegon's Response and Customer Support Measures
A spokesperson for Aegon UK issued a statement acknowledging the ongoing issues: "In August 2024, we carried out a planned systems upgrade affecting some customers with older products no longer marketed. While most customers experience no disruption or only short‑term issues, a minority experience longer‑lasting impacts, and we are sorry for the inconvenience this causes."
The company further explained their approach to managing the situation: "Where delays have occurred, contributions are held securely and applied once processing is completed, and no savings are lost. Dedicated teams are in place to support affected customers, and remediation is being applied where appropriate to ensure no one is disadvantaged." Aegon maintains that only a minority of customers have experienced long-term impacts from the IT failure.
Broader Implications for Pension Security
This case raises important questions about the reliability of digital systems managing critical retirement savings and the adequacy of compensation when failures occur. The seventeen-month duration of unresolved issues for some customers suggests potential weaknesses in contingency planning and customer service protocols within the pensions industry.
The involvement of the Financial Ombudsman Service indicates the seriousness with which regulatory bodies view such administrative failures, particularly when they affect workplace pensions that represent the retirement security of numerous individuals.
