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FOS Sipp complaints up 86%

Sipp complaints to the Financial Ombudsman Service increased 86 per cent to 3,811 in the 2018/19 financial year.

FOS says the rise in Sipp complaints is the biggest contributor to an overall increase in pension complaints which were up 40 per cent to 7,449 in the same period.

Within the category of pension and investment products, the proportion of complaints about pensions went up six percentage points from 42 per in 2017/18 to 48 per cent in 2018/19.

Across the board, PPI was by far the most common product complained about with 186,417 new complaints in the last financial year, making up 46 per cent of the total 388,392 complaints. This total figure is up 14 per cent, from 339,967 in 2017/18.

According to the ombudsman service, around 60 per cent of the 3,811 Sipp complaints were about provider due diligence. It notes around two thirds of the Sipp complaints were brought by claims managers, law firms and other third parties which tend to act for consumers in relation to provider due diligence complaints.

In contrast, a third of Sipp complaints in 2017 /18 were brought by third parties.

FOS says 15 per cent of Sipp complaints were to do with advice to transfer to a Sipp and invest in unregulated collective investment schemes.

The rate of Sipp complaints upheld by FOS went up nine percentage points to 62 per cent last year. This is more than double the 28 per cent average rate of complaints being upheld across all products.

Another area with a spike in complaints was occupational pension transfers, up 44 per cent from 553 in 2017/18 to 798 in 2018/19.

A statement from the ombudsman service says these complaints and are generally about administrative delays rather than financial advice.

FOS chief ombudsman and chief executive Caroline Wayman (pictured) says:

“Investment and pension complaints are at their highest level in five years. While self-invested personal pensions can give consumers more control over how and where their pension funds are invested, consumers and advisers need to ensure this is the right vehicle for them.

“Decisions about pensions are some of the most difficult choices people make, and it’s important that consumers understand the risks involved when investing their pension pot.”

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