FOS upholds majority of SIPP complaints

The Financial Ombudsman Services has upheld the majority of SIPP complaints it received over the past year and warned that it continues to see a large number of SIPP complaints amid a rise in overall investment and pensions cases. The FOS said it received a much larger volume of complaints about investment and pensions than it expected in 2020/21. It its annual report out this week the FOS said: "We continued to see a large number of complaints against self‑invested personal pension (SIPP) operators, where consumers had transferred their pensions to SIPPs to make unusual unregulated investments. We saw many examples of these transactions resulting in the loss or likely loss of consumers’ pensions – and upheld a majority of these complaints." The ombudsman received 20,854 complaints related to investments and pensions over the past year, almost double the 12,500 expected. It resolved 15,521 of these investment and pensions complaints with a 22% uphold rate. This uphold rate is lower than the 31% of total complaints upheld by the ombudsman over the period although the majority of SIPP complaints were upheld. The FOS said the majority of complaints related to a providers’ administration or customer service. The average cost per case for the Financial Ombudsman Service (FOS) has risen to £1040 in 2020/21 from £920 the previous year. For the year ending 31 March, the FOS upheld 31% of overall complaints. This figure rose to 40% with the exclusion of PPI claims. In its report week, the ombudsman said the FCA has approved a compulsory jurisdiction levy of £96m and an increase in its case fee to £750 to help address the deficit the FOS has built up during the pandemic. The free case allowance for individual firms will be maintained. The ombudsman reported a slight drop in the percentage of cases resolved with an informal view. In 2020/21 87% of complaints submitted by consumers to the FOS were settled with an informal view, in comparison to 90% the year previous. The ombudsman missed its case allocation targets by a long way. Only 50% of cases were allocated to a case handler within 28 days. The ombudsman targets 100% of cases to be allocated within this timeframe. Answers to complaints were also slower than expected. Only 36% of complaints received an answer within 28 days where the ombudsman targets a 50% response rate within this period. The annual report showed that the number of resolved complaints more than 12 months old by 31 March remained steady at 90%, slightly below the 95% target published. Consumer satisfaction with the ombudsman fell well below the 65% targeted. Just over half (54%) of consumers said the were satisfied with the FOS service in comparison to 6 in 10 (57%) the previous year. FOS chairman Baroness Zahida Manzoor acknowledged the long wait times and missed targets and said the ombudsman has responded by restructuring the board and starting a review process with a view to changing the structure of the ombudsman in the future. The ombudsman published 28,053 final decisions over the year, a slight rise from the 25,940 published in 2019/20. Earlier this month the FOS proposed changes to its case reporting process to encourage firms to settle early and reduce waiting times. The FOS proposed the temporary changes in a consultation paper saying that it wants more firms to settle complaints before they are investigated by the service. To prevent firms from taking a hit to their reputation with high uphold rates, the FOS said it would create a separate category for recording complaints proactively settled by a firm before the FOS has issued an opinion. These complaints would be recorded as having either a change in outcome or no change in outcome but would not contribute to a firm’s overall complaints uphold rate.

FOS upholds majority of SIPP complaints

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