According to figures released on Tuesday, the Fos had 427 enquires about Sipps between April and June, of which 328 were complaints .
Around 66% of the complaints were upheld – the highest proportion when compared to any other product.
Meanwhile, annuities had the lowest uphold rate of just 13% for its 128 complaints, while open-ended investment companies received the lowest number of complaints (34) overall between April and June.
FSCS Sipp compensation
The findings come as, last week, research from the UK’s Financial Services Compensation Scheme (FSCS) showed that payouts to UK consumers, aggrieved by poor life and pensions advice, have more than doubled due to an increase in high risk Sipp investment claims.
In the first quarter of 2016, the FSCS, which is funded by a levy on financial services firms, paid out £84m ($110m, €99.5m) in compensation for the life and pensions advice sector, compared to £35m for the whole of the previous 12 months.
Case Study
In one complaint relating to annuities, Mr S, an expat living abroad in country B, bought a pension plan in country A via a UK-authorised pension provider.
On receiving his annual annuity statement, Mr S complained to Fos that he had been taxed in both country A and country B – despite sending a letter with his annuity application stating that he had not lived or paid tax in country A for over a decade.
As there was no double taxation agreement between the two countries, he couldn’t claim any tax back himself. The UK pension provider tried but failed to get country A’s tax authorities to waive the tax, instead offering a £200 compensation for their poor service.
However, the Fos failed to uphold the complaint, stating that Mr S should have taken financial advice about his tax status and arrangements, as the pension provider had advised, before taking out the annuity 35 years earlier.
The watchdog added that he could’ve reviewed and rectified the situation at any time since then, which was not the responsibility of the pension provider.
