• Home
  • News
    • People moves
    • Africa
    • Asia
    • Australia
    • Canada
    • Caribbean
    • Domicile
    • Europe
    • Latin America
    • North America
    • Middle East
    • US
    • US
    • UK
  • Products
    • Funds
    • Pensions
    • Platforms
    • Insurance
    • Investments
    • Private Banking
    • Citizenship
    • Taxation
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Directory
  • Video
  • Advertise with us
  • Directory
  • Events
  • European Fund Selector
  • Newsletters
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
  • Advertise with us
  • Directory
  • Events
    • Upcoming events
      event logo
      International Investment Nordic Forum 2021

      International Investment is delighted to announce the 2021 International Investment Nordic Forum which will take place on Tuesday March 9, at 9am (GMT). This curated virtual event will be broadcast live and will feature a series of fund manager interviews and presentations, as well as interviews with some of the Nordic regions top fund selectors.

      • Date: 09 Mar 2021
      • ONLINE, ONLINE
      event logo
      Sustainable Investment Festival 2021

      The Sustainable Investment Festival will run online from 22-25 June and will include thought-provoking presentations from renowned keynote speakers, innovative breakout events and sessions specifically tailored to meet the information needs of fund selectors, financial advisers, pension consultants, trustees and scheme managers.

      • Date: 22 Jun 2021
      • Online, Online
      View all events
  • European Fund Selector
International Investment
International Investment

Sponsored by

Sharing Alpha
  • Home
  • News
  • Products
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Video
  • Investments

FSCS: levy on UK financial, pensions advisers to rise again; SIPP claims cited

FSCS: levy on UK financial, pensions advisers to rise again; SIPP claims cited
  • Helen Burggraf
  • 19 January 2018
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  

The UK’s Financial Services Compensation Scheme said today that it plans to increase the amount it levies on UK financial services businesses by 5%, even though the period of time covered will only be nine months rather than 12, citing “the higher cost of enhancing FSCS resilience”. 

In its 28-page Plan and Budget 2028/19, the FSCS noted that compensating people who had lost their savings through self-invested personal pensions, or SIPPs, was a particular problem.

Related articles

  • FSCS declares three SIPP operator firms in default
  • Out-of-pocket investors welcome news FSCS could scrap £50,000 comp limit
  • UK gov’t publishes response to DWP pension scam report
  • Industry shock as UK Budget 2017 reveals QROPS 25% transfer levy

It was the fourth year in a row that the FSCS has announced an increase in its annual levy on the industry. The FSCS was set up in 2000, and covers  deposits, insurance policies and insurance brokering, investments and mortgages.

In its annual Plan and Budget, the FSCS  said it would bill the financial services sector £336m to cover its compensation scheme payouts during the nine months to 31 March 2019, up from £320m for 12-month period ending in July 2018.

According to the FSCS, the life and pensions intermediation class will be charged £87m during the nine-month period ending on 31 March 2019, a £13m decrease on the current year’s total but, on a pro-rata basis, £12m more.

The growing pressures on the compensation scheme to fund claims from UK victims of failed investments and pension schemes are seen as having been fueled over the past two years in particular by the so-called Pension Freedoms legislation that came into force in 2015. As a result of that legislation, financial services firms in the UK and elsewhere have been targeting British pension-scheme members with the aim of convincing them to access and then reinvest their pensions.

As reported here in November, as many as 10.9 million people – or roughly one in six people in the UK – are now being cold-called about their pension each year, according to pensions minister Guy Opperman.

In its 28-page Plan and Budget 2028/19, the FSCS says  it “continues to receive significant numbers of claims against independent financial advisers regarding advice given to customers to transfer existing pension arrangements into SIPPs”.

It adds: “The vast majority of these claims relate to advice to invest pension monies into high-risk, non-standard asset classes within a SIPP wrapper. Owing to the risky nature of these investments, many of the funds became illiquid and often insolvent. These investments are unsuitable for the majority of investors.

“[The] FSCS expects to continue to see increased numbers of this type of claim, along with other types of life and pension related claims in 2018/19. This will lead to an increase in compensation costs because of the typically high value of these claims.

“That said, uncertainty remains as to the number and value of claims that [the] FSCS will receive in the coming period.”

To read and download the FSCS Plan and Budget, click here. 

 

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Investments
  • Pensions
  • Regulation
  • UK
  • Financial Services Compensation Scheme
  • FSCS
  • Self Invested Personal Pensions

More on Investments

II Nordic Forum 2021 - Meet the Speakers: KBI Global Investors and Wisdom Tree

  • Events
  • 04 March 2021
Woodford founders voiced concerns to FCA in 2015: reports

  • Regulation
  • 01 March 2021
FCA hands £3.4m back to unauthorised investment scheme victims

  • Regulation
  • 24 February 2021
Work and Pensions Committee to scrutinise UK pension freedoms

  • Pensions
  • 24 February 2021
EU removes Barbados from blacklist of 'non-cooperative' jurisdictions

  • Regulation
  • 23 February 2021
Back to Top

Most read

HSBC appoints CEO for the Middle East region
HSBC appoints CEO for the Middle East region
People moves: Phoenix Group, Franklin Templeton, TMF Group, AJ Bell, Arete, Just Group
People moves: Phoenix Group, Franklin Templeton, TMF Group, AJ Bell, Arete, Just Group
UK Budget: Sunak freezes lifetime allowance for pensions contributions
UK Budget: Sunak freezes lifetime allowance for pensions contributions
Nordic Fund Selector of the Year 2021 shortlist announced
Nordic Fund Selector of the Year 2021 shortlist announced
Europe's wealth mangers increasingly focusing on Bitcoin: survey
Europe's wealth mangers increasingly focusing on Bitcoin: survey
  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading