Unregulated asset held in a SIPP - how do we get rid of this?

I have a very lovely client of mine whose husband sadly died last year. When her husband was alive, he had a SIPP which contained investments, one investment of which was, I presume unregulated - I don’t wish to post the fund name, but it is essentially on the lines of “XXX Forestry Variable XXX SUSPENDED”

My client is wishing to transfer the assets held in the SIPP to a GIA and to take the pension which overall is valued at around £3,000. However, she is being told that the “suspended” holding is wrapped in a SIPP and is illiquid, and therefore a quarterly fee has to be paid to manage the SIPP, or if the asset is transferred into a GIA, there will be an ongoing charge of 40p per month to manage the asset. Either way, my client has to pay an ongoing fee for a suspended fund, that she does not want.

The “suspended” fund is apparently valued at around £700, but given it is illiquid, essentially has no value I am told. My client’s son, has also enquired into whether the asset can be given away to a charity, but I am told that in order for the suspended fund to be gifted away, it needs to be transferred into the GIA, and then once transferred the charity might reject the asset, in which case the problem will have simply evolved and not been solved.

Has anyone else dealt with something like this, and does anyone have any solutions on how a suspended holding, wrapped in a SIPP (which has a management fee attached to) it can be closed off? My client (the deceased’s wife) doesn’t want anything from this asset, she just wants to ensure that she does not pass any ongoing liability / fund charges to her children in due course when she dies. And wants the suspended fund gone. The ongoing charges are minimal but the point is, my client simply does not want the asset, or the ongoing issues that may come with it.

I’d be really appreciative of any solutions any contributors might be able to give. I am wondering whether we can go down the route of contacting the provider to say that a contract ceases on death and therefore no ongoing fees should be paid, or to disclaim the asset. But even then, it would pass to my client’s children if so, and the issue would simply continue. None of this is really making sense to me.

I should note that the deceased made a complaint about this fund in 2017 (he passed away in 2025) and the complaint was not upheld by the provider. He did not go to the ombudsman about the fund and presumably any issue now would be a non-starter due to limitation.

Unhappily this isn’t an isolated problem.

What do the T&Cs of the SIPP say about unauthorised payments? Even if there’s a provision that the administrator can’t be forced to make an unauthorised payment (highly likely), it may be worth having a conversation with them to see if there is any way that route could be used (obviously with your client picking up the tax bill) with their agreement. I’m not overly hopeful, but it seems worth raising the question.

What exactly did the deceased complain about in 2017? If the complaint can legitimately be reframed, and hinge around the fact that your client’s death was the trigger for the complaint now being brought by the widow, that might be enough for the Pensions Ombudsman to be willing to look at the case. She would need to exhaust the provider’s own complaints procedure before submitting a complaint to the PO.

It would of course need to be a complaint with a valid basis, not just an objection to being stuck with a fund she doesn’t want. A determination from the Pensions Ombudsman in 2022 might be relevant (if not exactly helpful) reading: https://www.pensions-ombudsman.org.uk/sites/default/files/decisions/CAS-37994-X1V8.pdf