SIPP Claims

A Self Invested Personal Pension (SIPP) is a government approved UK personal pension scheme

£18.6 billion was added to personal pensions in 2013-2014 with 5.5 million people contributing

Since their introduction in 1989, more than a million people have used SIPPs to further their pension pot

However SIPPs can be risky as they rely entirely on the success of investments

It has emerged that some people have been mis-sold investments as a part of their SIPPs and are losing their hard earned pensions

Last year the Financial Services Compensation Scheme (FSCS) saw a rise in complaints related to SIPPs and have set aside £100 million to pay for compensation costs


Need to know

  • SIPPs are a personal pension that acts as a ‘wrapper’ and allows you to hold multiple investments and products in order to grow your pension fund 
  • As employers do not have to contribute towards SIPPs, many people saw their pension fund disappear due to poor advice and crooked advisers
  • SIPPs usually have higher fees due to the flexibility for investors
  • As charges within SIPPs are higher than in other types of personal pension schemes some firms advised their clients to switch to SIPPs purely to gain additional commission
  • Some SIPPs advisers encouraged their investors to pay into investments abroad which have since become illiquid subsequently losing investors substantial amounts of money
  • Risky investments include property, overseas investments and most environmental related investments
  • If you were new to investing, any investment that you felt uncomfortable with or did not understand could also be classified as mis-sold
  • Even high profile companies such as Harlequin Hotels and Resorts have been found to have mis-sold their investments
  • You could be entitled to thousands of pounds of compensation if your SIPPs investments have been mis-sold

Reasons to Complain

  • If you were advised to switch simply to earn your adviser additional commission when you may have been better off in an existing scheme
  • If you were not aware of annual management fees or that you would be charged for every transaction
  • If you exceeded your annual tax free limit of £40,000 you may have been forced to pay 55% in income tax, leaving you significantly worse off than you would have been in an alternative pension scheme
  • If you were given poor advice about the risk of alternative investments
  • If your adviser didn’t explain the risks of investing in property
  • If your adviser promoted the use of SIPPs for tax avoidance purposes
  • Or generally if poor advice left you worse off after investing in a SIPP scheme

How to Complain

  • Always take your complaint directly to your SIPP provider first and explain that you feel you have been mis-sold.
  • If they do not reply within 8 weeks or brush off your claim then you can go to the Financial Ombudsman Service (FOS) who will be able resolve your complaint
  • If your SIPP adviser is still trading then take your complaint to the FOS and explain that you feel you’ve been mis-sold specific investments
  • If your adviser has ceased trading then take your complaint to the Financial Services Compensation Scheme and explain your situation
  • There is a maximum compensation limit of £50,000

The inside track

  • The Financial Ombudsman is finding in favour of two thirds of SIPP cases
  • SIPP are still a worthwhile way to expand your pension fund, just be careful to look in depth where you are investing your money
  • If your pension provider is FCA regulated any money paid in but yet not invested is 100% safe
  • It is purely the investment element of SIPP that make them a little bit risky

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