Sipp complaints to ombudsman on the increase

Sipp complaints to ombudsman on the increase

The number of complaints about self-invested personal pensions received by the Financial Ombudsman Service so far this year has already exceeded the quantity for the entirety of 2016 to 2017.

Figures released by the ombudsman today (31 January) show it received 546 new cases in the third quarter of the year - between October and December.

This means that during 2017 to 2018 so far it has received 1,575 complaints about Sipps, compared to 1,493 for the whole of the previous year.

But the percentage of complaints which have been upheld has gone down slightly - from 56 per cent to 51 per cent.

Sipps were the 13th most complained-about product in the third quarter of the year.

The Financial Services Compensation Scheme has also reported soaring numbers of compensation claims related to Sipp advice from now failed firms.

Earlier this month the FSCS announced plans to up the amount it levies from the industry by £16m, including raising more money from pension advisers for the fourth year in a row as Sipp claims continued to mount.

Once again, the product which received the most complaints was payment protection insurance, with 43,394 claims for compensation in the third quarter of the year alone, bringing the total for the year so far to 135,364.

Current accounts were in a distant second place, with just 4,976 complaints in the third quarter.

In total there were 81,647 new cases at the Fos during the third quarter, with PPI accounting for 54 per cent of these.

In August the Financial Conduct Authority started the clock on a two-year countdown to the deadline for making a complaint about PPI.

Last year John Moret, who was a director of Provident Life when it offered its first Sipp 25 years ago, predicted thousands of investor claims about investments made into self-invested personal pensions are still pending, leaving both advisers and providers exposed to costly claims.

Mr Moret, who is now principal at advice firm More2Sipps, complies an annual report on the state of the market.

He has estimated there could be 10,000 Sipp related claims in the pipeline - but as many as 50,000 investors with potential grounds for complaint.

Central to his calculations is the issue of what the Financial Conduct Authority terms 'non-mainstream investments', which tend to be more exotic, higher risk, often unregulated projects such as Brazilian teak farms or storage pods.