Consumers won more than £327 million (€471 million) in compensation from financial services firms in 2014/15, with the industry seeing more claims for self-invested personal pensions (SIPPs).
The Financial Services Compensation Scheme (FSCS), which protects consumers for free when authorised financial services firms fail, received more than 53,000 new claims in total in 2014/15, according to its latest annual report and accounts, including an increase in general insurance claims.
The number of new claims was similar to the year before, but the makeup of claims was significantly different.
The FSCS saw more claims against intermediaries advising on investments and on life and pensions business, and a general increase in the cost and complexity of these claims.
The average compensation payment for SIPP-related claims against independent financial advisors went up by nearly 50% to £16,375. In contrast, last year’s average payment was £11,104.
As a result of these claims, the scheme raised an interim levy of £20 million in March 2015. It expects SIPP-related claims to continue to rise in 2015/16.
The FSCS has also focused on maximising recoveries to reduce its levy costs. £560 million were recovered from the estates of failed firms and this included £494 million from the major banking failures of 2008/09.
Mark Neale, FSCS chief executive, says: “Pursuing recoveries is a vital way in which we deliver savings to the industry. Our strategy and interventions are producing highly positive results to the benefit of taxpayers and levy payers alike.”
©2015 funds europe