The Financial Ombudsman Service (FOS) has reported a 60% increase in complaints during the release of its data for the 2020-21 financial year.
In between April 2020 and March 2021, the Ombudsman reported 235,989 cases, excluding claims related to payment protection insurance (PPI), compared to 146,627 complaints in 2019/21.
Investments and pensions complaints rose 91% with 20,854 cases in 2020-21 from 10,920 in the previous 12 months.
PPI still remained the product with the most complaints, but it accounted for just 15% of the overall number of cases.
The FOS has largely attributed the increases to the impact of the pandemic, and said that “many complaints might have been avoided with better communication”, where businesses’ ability to manage customer expectations could have effectively generated “goodwill and pragmatism, rather than distrust and frustration”.
The Ombudsman added that, had there been attention to individual circumstances, its intervention may not have been needed.
“It’s often because the business hasn’t addressed what’s gone wrong, or suggested a way forward that’s right, for that particular customer,” it said.
Investments and pensions
Starting from the 2020-21 financial year, complaints for term assurance have been included in the investments and pension category for data reporting purposes – it was part of insurance claims until last year – which has “contributed to the size of the year-on-year difference” the FOS said.
In the last 12 months, the most complained about product in the category were Sipps with 3,021 new complaints, while the most complained about issue was administration or customer service with 8,483 cases.
The overall uphold rate for investments and pensions was of 22%, with the highest rate for Sipps (56%) and the lowest for mortgage endowments, whole-of-life assurance, and over-50s plans (6%).
“Consumers often don’t understand that their pension value is continuously fluctuating because it relates to underlying assets,” said Nina Walter, ombudsman at the FOS. “Businesses could do more to explain this. For example, when requesting to take benefits, switch funds or transfer their pension, customers should be clearly informed that the value they will get might be higher or lower than when they make their request.
“Explanations of how a particular product or process works should be easily understandable for the lay person.”
Support customers ‘when things go wrong’
Nausicaa Delfas, interim chief executive and chief ombudsman of the FOS, said: “The Financial Ombudsman Service continues to provide an essential service, helping people with hundreds of thousands of complaints about financial businesses last year.
Over the past year, we have seen demand for our service increase significantly, and our teams are working to provide resolutions in cases as quickly as they can.
“The sharp increase in complaints about issues other than PPI is a reminder that it has rarely been more important for financial businesses to support their customers when things go wrong.
“As people continue to deal with the impact of covid-19 on their lives and finances, they know they can come to our service if they’re not happy with how a financial business has treated them.”
