The Financial Ombudsman is dealing with more complaints about pensions and annuities.
The latest complaint statistics published by the ombudsman show a 33% increase in the number of gripes about self-invested pension plans (SiPPs) in the quarter ending September 30.
SiPP investors posted 176 complaints in the quarter, compared with 132 in the previous quarter.
The total number of SiPP complaints for the second and third quarters was around the same as those for the same period last year.
On average, just half of complaints are ruled in favour of the consumer.
UCIS investigation
SiPP providers are also currently under investigation by the Financial Conduct Authority (FCA), the UK financial services regulator, over concerns that unregulated collective investment schemes (UCIS) are too risky for pension investors.
“UCIS are high-risk, speculative investments that are not suitable for most investors,” said an FCA spokesman. “It’s easy to lose money with these investments, and if something goes wrong, the consumer has no recourse to a regulator or compensation scheme.”
The ombudsman also disclosed that the number of personal pension complaints is also on the rise.
In the last quarter, 381 complaints were made, compared to 330 in the previous quarter – but just a quarter on average are settled in favour of the consumer.
In general, investment financial services complaints showed mixed fortunes –
- Unit-linked investment bonds from 172 to 202, totalling 374 since April
- Annuities from 120 to 125, totalling 245 for the year
Although some dropped:
- Occupational pension transfers fell from 88 to 83, totalling 171 since April
- Portfolio management complaints fell from 313 to 272, totalling 585 since April
- With-profit bond complaints also fell, from 105 to 86, totalling 191 since April
Personal pensions
The ombudsman picked up 143,177 complaints between July to September, a 39% increase on the same quarter last year, when 103,197 were received.
The majority of complaints involved payment protection insurance (81%).
Typically, the most complaints involved banks, insurance and mortgages rather than investments. Personal pensions were the highest ranking investment product – taking 18th place out of 73 categories.
Many of the complaints about pensions involve misselling allegations or disappointment with fund values.
“A lot of pension and investment complaints relate to the finer points of how some investment products work and misunderstandings of the way fund values and payments are calculated,” said a spokesman for the ombudsman.
A list of recent decisions involving pensions and investments are posted on the Financial Ombudsman web site.