The Financial Services Compensation Scheme has named Sipp operators as catalysts for a £16m increase to its levy for the coming year.
The lifeboat fund says the £16m is a relatively small increase on its predicted figures in January, however.
In addition to an uplift in claims against Sipp operators, the FSCS says continuing costs for historic insurance failures also pushed up the price.
A total £74.6m in the £532m was attributed to the FSCS management expenses bill, or what it costs to administer the scheme outside of the cost of actual compensation payments.
The new 12-month levy is higher than the 2018/19 levy of costs of £468m, but that only covered a nine-month period between July 2018 and March this year.
Split down as a month-by-month cost, this puts the new levy £42m lower than the last.
Despite this, the lifeboat fund says pension claims resulting from poor advice remain the leading cause of cost increases, as they were in 2018/19.
The FSCS says: “The bulk of these claims will continue to arise from bad advice to transfer retirement savings out of occupational schemes and into Sipps – usually with a view to investment in risky or illiquid assets.”
Outgoing FSCS chief executive Mark Neale says the lifeboat fund will now push ahead with its “promotion and prevention” strategy for the 2020s.
He says: “These trends underline the important of the greater weight which FSCS intends to give in its strategy to both promoting awareness of FSCS protection and to preventing the mis-selling and advice failures which underlie these costs.
“Promotion and prevention are the counterparts of our continuing and undiminished commitment to be prepared for failures when they occur.
“We shall need the support of all our partners in the industry and the FCA.”
Former Royal Bank of Scotland executive Caroline Rainbird will assume Neale’s position as chief executive early next month.
Speaking at the time of her appointment two weeks ago, Rainbird said: “The strategy for the 2020s represents an exciting opportunity to build on the FSCS’ great work by protecting consumers when they need it and increasing their understanding of the full range of protection available.”
The total levy cost of £532m is now finalised after a consultation period.