Claims up to £50,000 will now be considered by the Financial Services Compensation Scheme (FSCS), particularly for those SIPPs containing funds invested in Harlequin Hotels and Resorts, Green Oil Plantations, and Sustainable AgroEnergy.
Prior to this announcement, consumers who had been advised to switch to a SIPP could only claim money for the loss in pension growth and for charges.
The FSCS said that in many cases, SIPP funds were invested in non-standard asset classes, many of which have become illiquid.
“Negligently advising”
The body also highlighted that IFAs may be legally liable for losses incurred from “negligently advising” clients to transfer funds from pension schemes into SIPPs, but that legal matters would be dealt with on a case-by-case basis.
Claimants who have received “interim compensation” will also receive top-up payments where extra compensation is due.
“Serious and ongoing”
There was a sharp rise in the number of people complaining about SIPPs last year, with the Financial Ombudsman Service (FOS) receiving 697 complaints in the space of 12 months.
Many of the complaints revolved around severe losses which had resulted from money being invested in unsuitable risky assets geared towards more sophisticated investors.
The Financial Conduct Authority also issued a warning after “serious and ongoing” failings were found in the advice given around SIPPs.
