The Financial Services Compensation Scheme is to start paying compensation for losses in the value of investments held in Sipps, as part of claims about advice to transfer pensions into Sipps.
Previously, the FSCS would only compensate consumers making claims about advice to switch to a Sipp for lost pension growth and charges.
Now it says it will consider claims for investment losses resulting from the advice, up to its investment limit of £50,000.
The FSCS says these claims will mainly relate to Harlequin Hotels and Resorts, Sustainable AgroEnergy and Green Oil Plantations. Claims relating to other investments held in Sipps will be considered on a case-by-case basis.
In July, the FSCS said it had declared four advice firms in default as a result of its investigations into Sipp claims: TailorMade Independent, 1 Stop Financial Services, Kynaston-Carnoustie Financial Consultancy and Crawford Scott.
It says the latest update applies to any adviser involved in advising investors to transfer their pensions to a Sipp where the fund is then invested in non-standard asset classes.
The FSCS says it is too early to say how much it expects to pay out for such claims.
Last month, the FSCS’s plan and budget for 2015/16 revealed the levy for life and pensions intermediaries is set to increase from £33m to £57m.
The lifeboat scheme said: “The FSCS is seeing increasing volumes of claims in relation to pensions advice, particularly claims in relation to advice to invest into Sipps. We expect this trend to continue and there is considerable uncertainty as to the amount of compensation we may have to pay in relation to these claims.”