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Collapsed Sipp firm’s 3,600 creditors could wait years for redress

Over 3,500 unsecured creditors who lost money with collapsed Lifetime Sipp Company will take “several years” to resolve according to an administrator’s report.

The report on Companies House from 2 April sheds light on how difficult it is proving to handle 3,600 unsecured creditor claims valued at £56.5m:

“There continues to be significant delays in working through the processes with the Financial Services Compensation Scheme and I estimate that our work in dealing with claims will not be concluded for several years,” it states.

The FSCS says it has not been able to declare Lifetime Sipp in default yet.

It adds the 3,600 unsecured creditors are separate from the 450 claimants who should have their claims handled within six months once Lifetime Sipp is declared in default.

In April 2018, Lifetime Sipp, that had links to unregulated investment schemes such as Harlequin, appointed Kingston Smith and Partners as administrators.

Lifetime operated 4,746 Sipps in total across three tranches with two tranches of “untainted” Sipps and one tranche of “tainted” Sipps.

There are 1,892 Sipps in the first tranche, 836 in the second tranche and 2,018 in the third “tainted tranche”.

Then in May Money Marketing reported Hartley Pensions had bought the “untainted” assets of Lifetime and agreed to administer the “tainted” Sipps as well.

Kingston Smith and Partners subsequently wrote to 3,500 addresses to find out the scale of the claims and initially settled on 2,018 actual Sipp clients chasing almost £56m in total.

Around £22m-worth of claims are from clients who have no insurance, while £34.5m might have insurance.

Last October the lifeboat fund told Money Marketing it had sought the advice of an external legal counsel about these claims and is currently awaiting that advice.

The FSCS added once it considered the advice, it hoped to be in a position to decide whether or not to formally declare Lifetime in default so it can start paying out compensation.

The report published today says the FSCS does not yet consider Lifetime in default as there needs to be at least one eligible claim against it to conclude the claims process.

The report adds: “It is expected that this administration, on transferring to liquidation, may take several years to be concluded.”

Furthermore the revised estimate for all the administration work that has been carried out is now £340,000. 



FSCS claims against Lifetime Sipp stack up

The Financial Services Compensation Scheme has received 19 claims against collapsed firm Lifetime Sipp Company as at 30 May, data provided to Money Marketing shows. The lifeboat fund opened claims against the Sipp provider in April and says 10 claims are in progress with nine applications underway. The FSCS adds it is not able to share any […]


Adviser to compensate over Lifetime Sipp Harlequin investment

Advice firm Lansdown Place Financial Management must compensate a client who complained about the transfer of their pension into a Harlequin fund through a Lifetime Company Sipp. A Financial Ombudsman Service ruling says Lansdown Place should not have processed the transfer into the unregulated investment. In 2012, Mr T invested £30,000 of his Sipp into Harlequin […]

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There are 4 comments at the moment, we would love to hear your opinion too.

  1. A legacy of the FSA/FCA, raise the alarm and provide the details and they……….. log it for future reference

    • As they did with London Capital & Finance – there is a trend here!

      • Julian Stevens 9th April 2019 at 9:31 am

        On how many occasions in the wake of having been judged to have been asleep at the wheel or having failed to act on numerous warning signs has the FCA claimed to have “learned lessons” and pledged to “do better next time”? It’s hardly a trend. More like a continuation of the FCA’s long established and shameful modus operandi, going back to the mismanagement of Equitable Life which went unchecked for several years and led eventually to its near collapse as long ago as 2000.

        Reading on its website the FCA’s decidedly questionable claims to secure an appropriate degree of protection for consumers, to protect and enhance the integrity of the UK financial system and to promote effective competition in the interests of consumers, one really has to wonder what forces are at work behind the scenes that prevent the Advertising Standards Authority from ordering it to remove them.

  2. From a FCA point of view “its not our fault we are just here to sweep up the mess” we (FCA) set the rules and guidance and collectively punish the many for the wrong doings of the few !!
    Hardly a strap line of a consumer champion, as they profess to be, as its ultimately the consumer who picks up the tab !

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