The Financial Services Compensation Scheme has issued a warning over Sipp advice as the investor lifeboat fund reported a 15 per cent increase in life and pensions intermediation claims.
The FSCS’s annual report shows it received 4,248 claims relating to the the life and pensions intermediation class in 2013/14, up 15 per cent on the 3,691 claims received in 2012/13.
It upheld 45 per cent of life and pensions intermediation claims in 2013/14, compared to 50 per cent of claims the previous year.
The FSCS says the increase is down to a rise in Sipp claims and continuing, although relatively low, volumes of mortgage endowment claims.
FSCS chief executive Mark Neale says: “I am increasingly concerned by the growing number of claims FSCS has seen in the past year arising from wrong advice to consumers to move retirement saving out of occupational schemes and into risky assets held within Sipps.
“We strongly support the action the FCA has taken to address this.”
The FSCS received a total of 39,258 new claims from consumers during 2013/14, 37 per cent lower than the number of claims received in 2012/13, which it puts down to falling numbers of payment protection insurance claims.
Total compensation was £243m in 2013/14, down from £326m in 2012/13.
The FSCS says 44 per cent of claims are made through claims management companies. It says claims firms are most active in claims relating to mortgage endowments, PPI, mortgage intermediaries and stockbroking.
The FSCS received 7,823 investment intermediation claims in 2013/14, down 36 per cent on the 12,300 claims received in 2012/13.
It upheld 83 per cent of claims in 2013/14 in this sub-class, compared to 90 per cent of claims in 2012/13.