The level of compensation paid in relation to investment advisers who have gone out of business has jumped a massive 156 per cent to £183.1m in 2014/15.
In its annual report, published today, the FSCS revealed compensation payouts against investment advisers in default has risen from £71.3m in 2013/14.
Payouts against life and pension advisers have also jumped 88 per cent over the last year from £18.7m to £35.2m.
The FSCS attributes the rise in compensation payouts against life and pension advisers to higher numbers of Sipp claims. It does not explain the rise in compensation against investment advisers.
The report also reveals the amount of compensation for Sipp claims against advisers has risen by 50 per cent.
The average payment rose from £11,104 to £16,375 this year, triggering a £20m interim levy on life and pensions intermediaries announced in March.
The FSCS says complaints and payouts related to Sipps are “likely to rise steeply” next year, despite the overall number of new claims across all products falling from 39,258 to 31,762 this year.
Chief executive Mark Neale says the rise in Sipps claims was caused by “poor advice to transfer pension savings from sound occupational schemes into Sipps and then to invest in illiquid and risky assets within the Sipp”.