19 complaints made about Lifetime SIPP in a single month

The Financial Services Compensation Scheme (FSCS) has revealed that it has received 19 complaints about the self-invested personal pension (SIPP) provider Lifetime SIPP in May alone, Money Observer have reported.

This shocking figure brings the total number of complaints made about the provider to 70, according to Money Marketing. This increase reflects the wider SIPP market, where the number of complaints against providers has increased dramatically.

The FSCS, which is responsible for considering claims and awarding compensation against defunct financial services providers paid £105 million in compensation for SIPP claims in the 2016/17 tax year. In the 2017/18 tax year, this figure increased to £112 million, an increase of 7%. The consumer lifeboat service paid out a total of £405 million in compensation to 69,980 customers in the 2017/18 tax year, meaning that SIPP claims represent over a quarter of FSCS compensation paid during this period.

Out of these claims, some 6,360 were related to life and pensions products. The FSCS upheld some 5,800 of these claims, an uphold rate of 71%.

On average, the amount paid in compensation for each claim was £26,793. The FSCS have said that in the vast majority of these claims, investors have been convinced to put their money into non-standard asset classes which were high risk. Many of these investments have subsequently become illiquid and potentially insolvent.

These figures will do little to allay mounting concern amongst financial services providers, who have seen their levies to the compensation scheme rise as recently as January as the lifeboat fund looks to shore up against a predicted increase in SIPP claims against dissolved providers over the next 18 months.

The FSCS is also concerned that those customers who have been affected may not be aware of their service. Research by the lifeboat fund found that three in ten people who received pension advice did not know whether the products were protected by the compensation scheme.

If you fear that you may have been a victim of pensions mis-selling, contact Cooper Stern today. Our team have the expertise and experience to advise individuals and businesses on a wide range of financial misconduct issues. Please use our online enquiry form or call us on 01204 322 805 for your no-obligation consultation.