Pension transfer compensation rose to £40m in 2018, new data from the Financial Services Compensation Scheme shows.
According to the Financial Times, payouts for mis-selling reached £37.5m in 2017 and £20m in 2016.
The report states that the increase in payouts in the past two years coincides with a seven-fold rise in transfer activity, from £3.4bn in 2014 to £37bn in 2017, according to the ONS.
The FSCS data was requested by Nick Smith, MP for Blaenau Gwent in south Wales, who told the FT the fact the payouts have doubled is “absolutely shocking”.
He adds: “Many people – including some of my constituents – ended up losing thousands of pounds of hard-earned money beause of the poor advice they were given.”
The FSCS said it was is currently unable to disclose details on the number of firms, or complaints, which underpin the £40m in payouts because the information must be manually retrieved.
Chief executive of the FSCS Mark Neale says: “We see many examples of mis-selling as both regulated, but also increasingly unregulated advisers, promote risky, illiquid investments.
“We see providers who fail to perform rudimentary due diligence on these investments.”