Our Guide to SIPP Pension Compensation Claims


Team Money Savings Advice

Money Savings Advice Guide to SIPP pension compensation claims

Amongst the most commonly mis-sold types of pension, SIPPs are notorious for causing trouble for hard-working savers. Self-Invested Personal Pensions can be complicated financial products, with many people transferring to a SIPP when the product really isn’t that suitable.

Thanks to the FSCS, you’re protected for up to £85,000 if you’ve been mis-sold a SIPP pension. You can make a claim for compensation for financial and emotional loss. If your claim is upheld, compensation may be awarded.

SIPP compensation claims might help you get your money back if you were mis-sold a SIPP product. Read on to learn about SIPP pension problems and how you might claim compensation.

Read on to find out more about SIPP pension compensation claims, what you can and should do and how Money Savings Advice can help.

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Why Are SIPP Pensions Problematic?

A SIPP is like a DIY pension. As the name implies, a Self-Invested Personal Pension is one where you’ll control your own investments. You’ll decide where your pension funds are invested and will need to keep a close eye on their value.

SIPPs provide a lot of flexibility and plenty of investment choice. If you’re an experienced investor, this kind of pension can bring some incredible benefits. Most people aren’t investment experts, which means that controlling their own pension funds can be incredibly risky.

It’s easy to lose money by making wrong moves with a Self-Invested Personal Pension. Ideally, these products should only be chosen by those with solid investment knowledge. There are too many variables and potential scams that could easily catch out anyone naïve in the world of investing.

What Happens When a SIPP Is Mis-Sold?

A SIPP is mis-sold if you’ve been pushed towards the product without a full appreciation of the risks. Perhaps you were directed just towards a SIPP, though you might also have been offered several different options whilst the drawbacks of SIPPs were glossed over. Even if you feel like you made the choice yourself, you could have been mis-sold a SIPP if you didn’t understand what is involved.

It’s easy to be swept up by words like ‘flexibility’, ‘control’ and ‘financial gains’. These buzzwords make the average SIPP sound like a fantastic pension product. Sadly, the reality is that SIPPs are very often bad choices. Many people lose money by being given more control than they actually know how to handle.

Being unable to manage a SIPP isn’t your fault. Successful investment requires a lot of knowledge, and gambling with your life savings and your retirement funds shouldn’t be the way to test those skills!

Did You Get Bad Pension Advice?

You might have received bad pension advice if you were only told the benefits of SIPPs. You might not have understood that you’d need to be active and carefully monitor investments. You might have been led to believe that your funds would look after themselves for the most part.

Bad pensions advice can mean that people end up with products that don’t meet their needs. Did you receive advice that took into account your current, unique situation? Finding the right pension takes time and effort, so this isn’t something that can be resolved with a ‘one size fits all’ solution.

Receiving bad advice could deplete your retirement savings. You could lose money through no fault of your own, which could damage your retirement plans.

Bad pensions advice is a lot less likely if your advisor is FCA approved. Make sure that you choose a pensions advisor that’s known to the Financial Conduct Authority and will take the time to learn about your plans. To choose the best pensions, advisors should know about your current savings, future plans and intended retirement age.

Can I Claim Compensation From the FSCS if My SIPP Provider Is No Longer Trading?

The Financial Services Compensation Scheme (FSCS) was created to provide compensation for victims where a negligent financial adviser has gone out of business. Therefore, if you have a claim for compensation and the SIPP ride is no longer trading, you should contact the FSCS. Very often the FSCS will contact you directly when attempting to reclaim client funds in the event of a failed business.

Unregulated SIPP Investments Without My Knowledge

Historically there have been numerous occasions where pension advisers have invested client SIPP funds into unregulated products without their knowledge. If you believe that your SIPP funds have been channelled towards unregulated investments without your permission, then you may well have a claim for compensation.

It is advisable that all of your dealings with a pension adviser/SIPP administrator are recorded on email or paper. This ensures that you have a paper trail in the event of problems in the future.

I Was Not Advised About My SIPP Investment Risks, Can I Claim Compensation?

If certain risky investments have been carried out within your SIPP (without your express consent), then there is every chance that you can claim compensation. However, if you were given documentation explaining the risk factors associated with your SIPP investments, but failed to read the documentation, that is different.

So long as the adviser has made you aware of the risks, then they are potentially protected from any legal action.

I Agreed to a SIPP Investment Strategy Which Was Inappropriate for My Situation

All financial advisers have a duty of care to their clients to ensure that the advice they are giving them is appropriate for their situation. So, if for example, an adviser switched the SIPP funds of someone in their 60s into high-risk investments, this would likely be deemed inappropriate.

If the client had carried out these investments on an execution only basis, then they would take on the risk, effectively indemnifying the adviser against legal action. However, whether or not you agree to the advice given, if it turns out to be inappropriate for your scenario, then you could argue the adviser has not carried out their duty of care.

Can I Pursue Compensation if Promised SIPP Investment Returns Fail to Emerge?

If an adviser categorically promised you a particular investment return which failed to emerge then yes, you can pursue compensation. You always need to be cautious where an adviser is promising a particularly attractive investment return which you know may be out of their control.

When receiving such advice, you should ask the adviser to put it in writing so that you have a paper trail. If they refuse, this should raise a red flag. Any adviser unwilling stand by their own advice, by putting it in writing, is not doing themselves any favours.

Money Savings Advice Tip

Wherever there is money involved there will be some unsavoury characters trying any means possible to make a quick buck. Sadly, thousands of people have lost their pension pots due to pension fraud, but thankfully, thousands of people are making compensation claims to recoup some of their financial losses. If you are a victim of pension fraud, you can speak to the Pensions Ombudsman or a specialist claims management company who will help.

Can My SIPP Provider Increase My Charges Going Forward?

While some SIPP administrators may promise fixed charges for a period of time, the vast majority will at some point introduce an increase in charges. Note, any increase in charges must be forewarned in writing to each and every client. This ensures they know exactly what is going on and if they feel aggrieved in any way, they can look to switch SIPP administrators/providers.

Individual SIPP charges can vary quite widely across the industry and are often dependent upon the level of advice required. The more the advice and guidance required, the higher the charges. You will also see that some SIPP administrators specialise in execution-only plans which are usually relatively low cost.

What Can You Do if a SIPP Was Mis-Sold?

If you feel that your SIPP was mis-sold, you might be able to claim compensation and get back any money that you’ve lost. You’ll be protected by the Financial Services Compensation Scheme (FSCS). Compensation can total up to £85,000, though most people won’t get the full amount.

As part of your claim, decision-makers will weigh up your financial and emotional loss. Joint account claims can get up to £170,000.

The compensation you’re awarded will reflect the value of anything you might have lost. It may include a small monetary figure for emotional distress you may have suffered. In most cases, SIPP pension compensation will help you get your pension savings back.

If you want to know how much of your pension is protected by the scheme, you can use the Financial Services Compensation Scheme’s own handy tool. Just enter your pension details and value, and you’ll see how much compensation you could get if it was mishandled.

You can find the tool, and other compensation guidance here.

How Can You Make a SIPP Pension Compensation Claim?

If you believe that your SIPP was mis-sold, first contact the advisor that sold it. Any good, reputable and FCA-approved advisor should help you to repair their mistake. If you’re unhappy with the offered solution, you can decide to take things further.

You can contact the Pensions Ombudsman to escalate your compensation claim. The Pensions Ombudsman provides a free impartial service to investigate mis-selling claims. If your claim is upheld, you can take things further and claim compensation for your losses.

How Long Do You Have to Claim Compensation?

You have up to a maximum of six years to claim compensation for your SIPP. You should claim within three years of realising your SIPP was mis-sold. You may not realise for a few years that you shouldn’t have chosen a SIPP, so the total six years will give you more time to act if you don’t realise straight away.

Can You Get Help With a SIPP Pension Compensation Claim?

You’re entitled to make a compensation claim without any professional help. Filing your own claim means you won’t pay fees and will keep all the money for yourself.

Many people don’t feel confident making a claim on their own. Solicitors can help with mis-sold pensions, though you will have to pay for this service. Hiring someone else can take the pressure away whilst also increasing your chance of a successful claim.

Your chance of success increases because your claim is led by an experienced and qualified professional.

The Importance of a Paper Trail

Whilst you’re getting pensions advice, and whilst you’re filing your complaint, always keep as much evidence as you can. Save emails, keep letters and take notes of any phone calls you’ve made. A raft of evidence could help to improve your chance of a successful compensation claim.

What Is a SIPP Wasn’t Mis-Sold?

Don’t be afraid to escalate your claim if there’s any chance your pension was mis-sold. You’ve nothing to lose from making a claim unless you pay the solicitor’s fees. Making a claim on your own means that you’re taking no risk, and the worst that can happen is that your claim isn’t upheld. If it’s decided that your pension wasn’t mis-sold, you can continue with a plan for the future.

Not every SIPP is mis-sold, even if it doesn’t go to plan. If you were fully aware of how SIPPs work and were told about the risks you’d take on, then it isn’t necessarily a mis-spelling issue if your retirement savings drop.

How Can Money Savings Advice Help You With Making a Mis-Sold Pension Claim?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Financial Claims management companies. They have already helped thousands of people claim compensation for a mis-sold pension and they can do the same for you.

Choosing an independent claims management company means they won’t proceed with a claim unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these claim management companies who can help you make a compensation claim, then click on the below and answer the very simple questions.


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