Fos investment and pensions complaints rise 91 per cent

Fos investment and pensions complaints rise 91 per cent

The Financial Ombudsman Service has seen new complaints about investments and pensions rise 91 per cent in the past year, according to its annual complaints data for the 2020/21 financial year.

Total new complaints stood at 278,033, with 20,854 about investments and pension, up from 10,820 in 2019 to 2020. 

Within the investment and pensions category, the most complained-about product was self-invested personal pensions, with 3,021 new complaints and the most complained-about issue was administration or customer service with 8,483 new complaints.

By comparison, last year Sipp cases stood at 2,606 while in the previous year it was 3,811.

Ombudsman Nina Walter said: “Consumers often don’t understand that their pension value is continuously fluctuating because it relates to underlying assets. Businesses could do more to explain this. 

“For example, when requesting to take benefits, switch funds or transfer their pension, customers should be clearly informed that the value they will get might be higher or lower than when they make their request. Explanations of how a particular product or process works should be easily understandable for the layperson.”

The data showed that the overall uphold rate was 31 per cent and for the investments and pensions category, this stood at 22 per cent. 

Within this group, the highest uphold rate was for Sipps at 56 per cent while the lowest was mortgage endowments, whole-of-life assurance, and over-50s' plans at 6 per cent. 

Last year Sipps had an uphold rate of 52 per cent and the year before, 61 per cent. 

Nausicaa Delfas, interim chief executive and chief ombudsman of the Fos, said: “The Financial Ombudsman Service continues to provide an essential service, helping people with hundreds of thousands of complaints about financial businesses last year. 

“Over the past year, we have seen demand for our service increase significantly, and our teams are working to provide resolutions in cases as quickly as they can.

“As people continue to deal with the impact of Covid-19 on their lives and finances, they know they can come to our service if they’re not happy with how a financial business has treated them.”

Banking and credit complaints amounted to 170,648, followed by 44,487 for insurance, 42,040 about payment protection insurance and 1,113 for claims management companies. 

The Fos has a current backlog of thousands of cases. Nevertheless yesterday it confirmed it was making 200 people redundant in its mass claims department following a review.