Fos predicts pension complaints to stay flat

Fos predicts pension complaints to stay flat

The Financial Ombudsman Service has predicted complaints about pensions and investments will not go up next year despite concerns from advisers.

In its business plan for 2019/20, out today (December 17), the Fos predicted it would receive 14,500 complaints about pensions and investments - the same number as this year.

The Fos highlighted that the number of complaints about these products it ended up receiving this year was broadly in line with the number it had expected.

It said: "Although these complaints represent a small proportion of our overall casework, they account for a significant proportion of the complaints we receive about financial advisers.

"Advisers have told us they’re particularly concerned about potential complaints involving transfers out of defined benefit pension schemes. This includes complaints from people who feel they shouldn’t have been advised to transfer out, think they’ve lost out due to delays, or are unhappy with advisers who’ve refused to help them access their pension pot."

To address these concerns, the Fos said that in September it attempted to provide advisers with greater clarity about its approach and convened a panel of experts, including former pensions minister Sir Steve Webb and Pension Advisory Service chief executive Michelle Cracknell.

The Fos also plans to invest in more capacity for 2019/20 despite the prospect of payment protection insurance complaints coming to an end.

Complaints about PPI currently make up more than half of the cases handled by the Fos but from August 2019, consumers will no longer be able to complain about having been missold this product.

Despite this, the Fos has said in its business plan for the upcoming year that it is planning to invest in increasing its complaint-handling capacity.

The Fos said: "At the same time as dealing with the challenge of PPI – and preparing for uncertainty before its conclusion – we’ve seen a sustained rise in complaints about borrowing and debt.

"In particular, we’ve needed to respond to a significant year-on-year increase in complaints about short-term lending: payday and instalment loans.

"Our current view is that it’s appropriate to invest in more capacity in 2019/2020. Not doing so would risk compromising our ability to respond quickly to complaints.

"Given the proportion of our current and expected caseload involving borrowing, a significant number of people contacting us may be in vulnerable circumstances – and we’ll continue to focus on identifying and supporting people in these situations."

The Fos has acknowledged there was a risk that it is investing in capacity it may not need, highlighting the troubles faced by payday lender Wonga, which went into administration in August.

It said there was a possibility other payday lenders would face similar difficulties.

The Fos is budgeting for an increased total expenditure of £332.2m in 2019/20, up from £285.2m - though it is also predicting income will increase from £229.4m to £296.2m.