SIPP Providers Paying Out More Than Savers Put In

505

SIPP providers paid £3 billion more to pensioners than they picked up in contributions in the last three months of 2018.

Pensioners were paid £15 billion, while only £12 billion flowed into the self-administered pension plans.

The gap between money coming in and going out is widening.

In the third quarter £14.5 billion was paid out and £12.6 billion came in, according to data from the Office for National statistics (ONS).

The figures also revealed that pension funds, trusts and insurance companies saw overall net disinvestments of £34 billion in Q4 2018, the fourth quarter in a row showing net disinvestment in total assets, and the highest level of disinvestment for 32 years, since records began in 1987.

Booking.com

Ombudsman under fire about SIPP claim delay

Meanwhile, the Financial Ombudsman has come under fire for holding up hundreds of claims relating to a legal row over if a SIPP provider is responsible for the failed investments of a client who staked money in unregulated investments.

Carey Pensions argued the loss was the client’s fault as the firm did not give any investment advice, but the pension saver and the Financial Conduct Authority claim otherwise.

The ombudsman is adjudicating a flood of similar cases and has put a ruling on the back burner pending the result of the case in the High Court for more than a year.

APJ solicitor Glyn Taylor claims the case is taking an unusually long time for the ombudsman to adjudicate. The firm specialises in taking cases against financial services providers.

Bold submissions

“It is unusual, to say the least, for it to take 12 months for the initial judgement to be handed down,” he said. “It is such a high-profile case as far as the industry is concerned, and has the involvement of the FCA.

“The FCA made bold submissions as to what it considers to be the regulatory requirements. I can only think really they that want to get it right. I still think the judgement will be appealable either way.”

Due to high risk levels, SIPPs aren’t suitable for everyone, and many people have been mis-sold SIPPs that aren’t suitable for their situation, say the lawyers.

Download the Free Pension Transfer Guide

Expat Pension Transfers Guide

iExpats.com expert writers have created a simple guide to Expat Pension Transfers just for you.

Find out how you could save tax, increase growth and investment opportunities with this simple, no-nonsense guide that will introduce QROPS, SIPPs and QNUPS options and talk through the pros and cons. Download the free guide by following the link below

Leave a Reply