Out-Law News | 14 Jun 2017 | 10:05 am | 1 min. read
Complaints made about independent financial advisers (IFAs) were also upheld at a higher rate when those were to do with the sale of a self-invested personal pension (SIPP) or small self-administered scheme (SSAS), according to the FOS annual report.
The FOS received 1,574 complaints about SIPP and SSAS products during the year to 31 March 2017, compared to 1,174 in 2015/16, according to the data. SIPP product complaints about IFAs were upheld 64% of the time, compared to 36% of IFA complaints overall, the FOS said.
Other than a "loose reference to advice and administration", the FOS did not speculate about the reasons for the increase in its annual report, said pensions expert Tom Barton of Pinsent Masons, the law firm behind Out-Law.com.
"It may be that SIPP and SSAS members and their advisers are struggling to come to terms with upheaval in tax rules and regulation – and complexity in the system generally," he said. "There is also still a high volume of problematic transfer requests to suspected pensions liberation scams involving SSASs."
"It may simply be that there are growing numbers of SIPP and SSAS members, perhaps as a result of the pension freedoms; and therefore the rise in claims is proportionate to the rise in membership numbers," he said.
Barton added that the products "continue to play a major role in the pensions jigsaw for large numbers of people".
"They plug the gap that auto-enrolment schemes leave for the self-employed, high earners and those looking to make use of different rules and options," he said. "In particular, they play a key role in the delivery of retirement freedoms."
A SIPP is a type of personal pension plan which allows individuals to choose how their savings are invested from the full range of investments approved by the government and tax authorities. A SSAS is a type of single-member occupational pension scheme. Last year, the UK government proposed the introduction of stricter registration requirements for single-member occupational pension schemes as part of a package of measures to tackle pension scams. Its response to a consultation on its proposals has been delayed by the early general election.
The FOS complaints data also showed a "striking" increase in the number of complaints involving payday lending, which the ombudsman said could be attributed to high-profile regulatory action by the Financial Conduct Authority (FCA) increasing awareness among consumers of their rights. The majority of the complaints received by the ombudsman last year were to do with loans entered into before the FCA introduced tougher regulation of the products, the FOS said.
Complaints relating to potentially mis-sold payment protection insurance (PPI) still account for the largest number of complaints handled by the FOS, according to the data.