Regulation  

Fos asks for advice on pension freedoms complaints

Fos asks for advice on pension freedoms complaints

The Financial Ombudsman Service has asked for industry views on whether there will be a rise in pension-related complaints as ‘freedom and choice’ reforms are implemented this April, as it put forward a lower budget for the coming financial year on the basis claims would remain flat.

Fos’s proposed plan and budget for the next financial year was published today (6 January) for public consultation, in which it stated that based on current trends it expects to receive around 16,000 new cases on investments and pensions this year, in line with the 2014/2015 assumptions.

At this stage, the ombudsman said it is assuming that the only new or emerging issue where we will be dealing with higher case volumes in 2015/2016 is packaged bank accounts.

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However, it asks: “We would particularly welcome feedback from our stakeholders about any other emerging issues which they think we may see. For example, given the current attention on pensions, are we likely to receive more pension-related complaints?”

It gave no further commentary on the issue, but detailed that views on the various proposals are welcomed until 16 February, when the budget will be finalised and put to the Financial Conduct Authority for approval in March.

In terms of the budget itself, the ombudsman will ask the FCA to raise an overall levy for the compulsory jurisdiction of £23.3m in 2015/2016, the same as the amount FCA collected this year, meaning the overall amount of the levy would be frozen.

The plan is to set an operating income budget of around £220.7m for 2015/2016 after ending the 2014/2015 financial year with total operating income of around £253.7m. This would mean the ombudsman would need around 13 per cent less from firms, following a 26 per cent decrease this year.

It plans to once again freeze the standard case fee at £550 and to maintain the number of free cases at 25.

The ombudsman is particularly interested in views on volumes of complaints about Payment Protection Insurance, volumes of new cases other than PPI, and volumes of enquiries about mis-sold packaged bank accounts.

The report states that while the total number of cases involving products other than PPI is likely to be broadly stable next year, the products involved in these cases is still likely to change, meaning the ombudsman needs to have the right mix of fully-trained case-handlers.

It set out plans to recruit an additional 200 adjudicators and ombudsmen in order to resolve a further 250,000 disputes involving mis-sold PPI, reducing the number of existing PPI cases from around 280,000 to 180,000.

For planning purposes, the ombudsman says it is also currently assuming it is likely to see an increase in non-PPI cases from 125,000 forecast in 2014/2015 to 132,000 in 2015/2016.

Caroline Wayman, chief ombudsman, said that the volatility of complaint levels remains a significant challenge when planning for the future. “But we’re finally seeing evidence that the number of complaints referred to us by consumers is starting to stabilise.

“On the other hand, complaints about PPI are still the main driver of financial disputes, and although numbers are slowly declining, it will be years before we can truly say this mis-selling scandal is over.