Financial Ombudsman Service  

Sipp complaints drop for first time in 6 years

Sipp complaints drop for first time in 6 years

The Financial Ombudsman Service has seen a decline in the number of complaints it received about self-invested personal pensions despite previous warnings these claims were likely to go up.

In data published today (August 21) the ombudsman saw complaints involving Sipps drop 2 per cent between April and June this year, when compared with the same period last year. 

This was the first time since the 2014/15 financial year that cases have slowed down in the first quarter - they had increased most significantly between 2017 and 2018 when they jumped 76 per cent. 

The Fos received 886 enquires and 906 new cases involving Sipps, compared with 1,107 enquiries and 922 new cases received last year. 

Personal pensions also dropped, with the service receiving 661 enquiries and 350 new cases in this area between April and June this year, a drop of 23 per cent and 20 per cent respectively from the previous year. 

The latest figures buck the trend of significant increases seen in Sipp claim activity in recent years, with the Fos reporting in its latest annual report that the number of complaints referred to the service increased 86 per cent to hit 3,811 in 2018/19, up from 2,051 in 2017/18. 

At the time the industry expected the hike in Sipp complaints to continue as misadvised clients continued to pursue cases and with CMCs being particularly active in filing Sipp complaints.

An enquiry becomes a new case once it has been validated by the Fos. 

It is not unusual for quarterly data to fluctuate, especially in areas where a high proportion of complaints were represented by claims management companies, but the Fos said it was too early in the year to determine any ongoing trend. 

The slight slowdown in pension gripes at the ombudsman comes as it debates changing its funding structure in anticipation of a shrinking service due to PPI complaints coming to an end.

In a funding consultation published last month the Financial Ombudsman Service proposed a funding model with a 50:50 split between case fees and the industry's levy, a move from its current funding split of 85 per cent coming from case fees and 15 per cent from the levy. 

Rebalancing its income structure, the ombudsman said, would reduce the risk of the Fos asking businesses covered by the service for additional funds throughout the financial year. 

Speaking at the time Caroline Wayman, chief ombudsman and chief executive at the Fos, said the service had tripled in size in response to PPI, but "assuming something of that scale doesn't happen again" it plans to be a smaller organisation in future. 

As a result Ms Wayman said she expects the overall cost of the Fos to fall. 

The proposed changes have not been well received by some however, with adviser trade bodies criticising the suggestions as "unreasonable" and a "moral hazard" 

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