This represents a 35% increase in Sipp-related compensation costs – the result of 3,565 consumer claims – in the fiscal year ending 31 March, compared with £78m in the previous year.
As stated by the FSCS’s annual report published on Thursday, the UK’s statutory compensation scheme paid out £375m in compensation costs, in response to nearly 37,000 claims.
As a result of the rise in Sipp claims, the cost of compensation regarding these pension plans is now expected to be £146m, with the total FSCS levy currently standing at £363m.
Dealing with failure
The lifeboat fund dealt with many key events during 2016/17, including tackling the failures of Gibraltar-domiciled Enterprise Insurance Company and Liechtenstein-domiciled Gable Insurance.
“We protected over 730,000 policy holders affected by these two major insurance failures,” the FSCS said.
“The 2016/17 year has shown, once again, that our workload can be volatile and unpredictable. Yet during the year, we have moved ahead with our strategy to improve our service and continued to focus on our readiness to respond to failures”, FSCS chief executive Mark Neale said.
Earlier on Thursday, it emerged that the FSCS picked up a £3m bill ($3.8m, €3.4m) in compensation to customers served by Kevin Neal, the former financial adviser to ex-football star Alan Shearer.
