Financial News

Complaints Keep Rolling In About SIPP Pensions

SIPP pensions are one of the most complained about financial products, according to new statistics.

The Financial Ombudsman has released figures for gripes about financial services in the last three months of 2017.

The complaints most upheld by the ombudsman were about instalment loans (63%) and payday loans (56%).

Although SIPPs ranked in 13th place by the number of complaints, they came third behind loans with a 54% upheld rate.

The ombudsman says 147,775 inquiries were received between October and December 2017.

Half of complaints upheld

Payment protection insurance continued as the most complained about financial product, accounting for 54% of complaints.

Across the 69 types of financial product that were complained about, the average upheld rate was 33%.

In Q3 2017, the ombudsman handled 498 SIPP complaints, with a 49% upheld rate.

Between April to December 2017, 1,575 SIPP complaints were opened, more than the 1,493 for the whole of 2016/17, says the FOS.

Complaints about workplace pension transfers also increased in Q4 2017, rising from 114 to 184. The number of upheld cases were also up from 25% to 37%.

Who saves in a SIPP?

SIPPs tend to be the retirement saving option of choice for expats who are still UK tax resident or intend to return home in the future.

Expats who have broken ties with the UK tend to opt for QROPS offshore pensions that have a similar structure to a SIPP.

SIPPS are popular with retirement savers transferring out of workplace pensions.

The pensions offer a wider range of flexible investment options than workplace or personal schemes.

They also come with pension freedoms that allow savers to withdraw cash to spend as they like from the age of 55 years old.

£24m set aside to top up compensation claims

Many complaints about SIPPs involve issues such as delays in processing pension transfers or losing money on investments.

In some cases, smaller SIPPs are set up by pension scammers as a holding place for money transferred out of another scheme.

The Financial Services Compensation Scheme is controversially increasing a levy to pay for SIPP claims. Advisers will have to find an extra £24 million due to the ‘continuing growth’ of SIPP claims and mistakes, says the FSCS.

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