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SIPP compensation claims above predictions have forced the Financial Services Compensation Scheme (FSCS) to ask financial advisers and providers to chip in an extra levy of £23.9m.
Nearly 3,600 consumers have been compensated for wrongly being advised to switch savings into ‘risky’ assets within SIPPs – at a cost of £105m.
The Association of Member-Directed Pension Schemes (AMPS), the body representing SIPP operators and SSAS practitioners, has voiced concerns about introducing a product levy to fund the FSCS and says the role of advice in causing later claims needs to be studied.
Advisers categorised as pensions and life intermediaries face paying an extra £36m to the FSCS next year due to rising cost of Sipps.
Advisers have been warned they face an extra FSCS levy next year as a result of rapidly growing claims related to Sipps.
The Financial Services Compensation Scheme has revealed a list of another 25 failed finance firms this morning - including a number of pension businesses.
The average FSCS compensation payments for a Sipp-related claim increased by 31% in the last financial year.
FSCS bosses said today they see no end to the high numbers of Sipp-related advice complaints next year.
The increased FSCS levy could mean total regulatory costs for Sipp operators in the sector could rise by an additional 75% this year when compared with 2014.
Average compensation payouts for Sipp related claims increased by around 50%
 to £16,375, the FSCS has revealed this morning.
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