The Financial Ombudsman Service has released new data showing a dramatic increase in the number of complaints about Self Invested Personal Pensions (SIPP) over the last quarter.
According to data released by the FOS, 380 new SIPP complaints were submitted between October and December 2017 – an 18% increase on the previous quarter, and a 38% increase in the number of complaints per quarter received in 2015-2016.
In addition to this, 47% of the SIPP complaints the organisation received were upheld, with 140 receiving a final decision from the Ombudsman.
This comes on top of an announcement made by the Financial Services Commission that they had taken the decision to introduce three new supplementary levies to meet the unforeseen compensation costs of SIPP claims.
As a result, the FSCS will levy financial services firms a total of £378 million this year.
Mark Neale, FSCS chief, has been quoted in the press stating: “We will ask life and pensions intermediaries to pay their share of an additional £36 million to fund compensation for the high numbers of SIPP-related claims we are continuing to receive, but we also need to trigger a cross-subsidy for the first time.
“These claims relate to advice to switch pension funds into high risk investments. We previously flagged the potential for high costs here.”
When it comes to personal pensions other than SIPPS, however, the number of enquiries is actually down – the FOC reportedly received 700 enquiries about non-SIPP related personal pensions during the last quarter of 2016, compared to the 869 received over the same period in 2015.
In fact, of all the products listed in the FOS’ complaints data, SIPPS had the joint highest percentage of upheld complaints for the nine months ending in December 2016, alongside payday loans.
The report also revealed that the number of SIPP complaints is expected to continue to rise throughout 2017.