Life and pensions advisers face a tripling of their Financial Services Compensation Scheme annual levy, from £13m to £40m.
The FSCS 2014/15 plan and budget, published today, proposes increasing the annual levy for life and pensions advisers to £40m for the next financial year, up from £13m for 2013/14.
It says it has started to see an increase in pension claims, including claims relating to Sipps, and expects more claims in this area in future.
The 2014/15 levy is the first to be calculated under the FSCS’s new 36-month funding approach, which it says will reduce the volatility of annual levies and the likelihood of interim levies.
It has therefore based levy calculations for each class on the average compensation costs over the past three years, expect for life and pensions intermediaries.
The FSCS says this is because “the level of claims we are receiving indicate a rising trend. We have therefore uplifted the levy amount for that class.”
Investment advisers face an annual levy of £105m for 2014/15, up from an annual levy of £78m for 2013/14.
However, the FSCS also expects to raise an interim levy of £30m on investment intermediaries before the end of the current financial year, taking costs for 2013/14 to £108m.