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Average compensation for pension products jumps the most

FCA executive director of strategy and competition Chris Woolard

Upheld complaints related to pension and decumulation products accounted for the greatest average increase in compensation pay outs over the second half of 2018 FCA data shows.

The average redress increased from £594 to £876 between 2018 H1 and 2018 H2, the latest round of complaints data published today reveals.

During the second half of 2018, complaints decreased by 5 per cent, falling from 4.13m to 3.91m.

This is the first time the number of complaints has fallen since firms were required to change the way they report complaints, in 2016.

Up to 3,181 firms reported receiving one or more complaints during 2018 H2, with 231 of these firms reporting 500 or more.

These firms accounted for almost 98 per cent of all complaints reported.

PPI continued to be the most complained about product, making up 40 per cent of all complaints.

But this was a decrease of 8 per cent from 1.72m in 2018 H1 to 1.58m in 2018 H2.

There was a change in reporting which allowed firms to exclude from their complaints return any PPI complaints where it was established that the complainant had not purchased a PPI policy from the firm.

Excluding PPI, total complaints decreased from 2.41m to 2.33m over 2018.

While remaining the second most complained about product, current accounts complaints decreased by 13 per cent over the half-year.

By contrast, credit cards, the third most complained about product, saw an increase of 10 per cent.

The proportion of complaints closed by firms within three days rose to 37 per cent compared to 35 per cent in 2018 H1; those closed within eight weeks rose from 92 per cent to 95 per cent.

There was also an increased proportion of PPI complaints that firms closed within 8 weeks, from 89 per cent to 97 per cent.

This shows that firms dealt with PPI complaints more quickly on average than in 2018 H1.

Redress paid for PPI complaints decreased from £2.32bn to £1.99bn between 2018 H1 and 2018 H2.

This period also saw a decrease in redress paid for complaints about banking and credit cards, from £141m to £133m.

This is due to a decrease of £28.5m redress paid for complaints about packaged accounts between 2018 H1 and 2018 H2.

FCA executive director of strategy and competition Christopher Woolard says: “It is encouraging to see that complaint figures have dropped and firms are dealing with complaints more quickly.

“We expect firms to continue to focus on ensuring their customers are well served and that they respond quickly where consumers complain.”

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