Collapsed pension provider Liberty Sipp officially failed on 25 January 2021, according to an update from the Financial Services Compensation Scheme.
The firm was placed into administration on 27 April 2020.
On 26 January, the lifeboat scheme said: “Our investigation has concluded that FSCS might be able to compensate customers who invested in Liberty Sipp.
“As a result, we’ve now passed claims to our claims processing team for assessment.”
A spokesperson for the lifeboat scheme confirmed to International Adviser that it has received 1,696 claims so far, but has no information regarding how many claims it expects to receive.
The maximum compensation that can be paid out by the FSCS is £85,000 ($116,323, €95,703).
Trapped money
Many clients were recommended to transfer their existing pensions to Liberty Sipp, while other made arrangements though unauthorised firms.
After the transfer, many customers had their money placed in high-risk, non-standard investments.
Some of these have become illiquid.
Industry anger
That the FSCS is being called upon again will likely put a few industry noses out of joint, especially after IA reported on Friday that compensation costs are expected to hit £1bn in 2021-22 – meaning even higher levies for firms to pay.
Although it is likely that Liberty Sipp’s collapse was taken into account when the FSCS came up with its projections.
