Thousands of people have invested their savings into underperforming pension schemes may soon be able to claim up to £85,000 from a special government fund that has been set up to compensate victims. £120 million pounds is available in the fund where people can currently claim up to £50,000. However, this is set to rise to £85,000 next April to reflect the growing number of people that have lost out.
The amount of SIPP mis-selling has drawn strong comparisons to the PPI phenomenon that has swept the UK over the past few years. The SIPP scams preyed on savers by promising huge returns of up to 20% a year, only for their savings to be lost on poor get rich quick schemes involving such things as green energy projects and airport parking.
Speaking recently at a meeting of the Work and Pensions committee, Frank Field MP said: "I am concerned about the role of SIPPs as platforms that help funnel unwitting clients' pension savings into dodgy and inappropriate investments. SIPPs are happy to skim off their fee on the way but there are serious questions about their commitment to due diligence and consumer protection."
"When an unscrupulous financial adviser channels a victim's money through a SIPP into an investment that then collapses, it is not enough for the SIPP provider to shrug their shoulders and say 'caveat emptor'."
"I will be writing to the FCA to ask what they are doing to ensure SIPPS are not acting as handmaidens to the pension-snatchers."