Complaints about self-invested personal pensions (SIPP) rocketed in the last quarter, according to the latest data from the Financial Ombudsman Service (FOS).
The FOS received 380 new SIPP complaints between October and December last year, 18% more than it received in Q2 of 2016/17 and 38% more than the average 274 complaints per quarter it received in 2015/16. It upheld 47% of SIPP-related complaints.
Bad advice on transfers into SIPPs was the underlying cause of complaints, according to FOS.
The Financial Services Compensation Scheme (FSCS) had already budgeted to levy life and pension advisers a record £171m in 2017/18.
Last month the lifeboat fund also confirmed its intention to raise an interim levy for 2016/17 of £36m for life and pensions advisers to fund "unexpected" numbers of SIPP-related claims.
Chief executive Mark Neale said the claims largely "related to advice to switch pension funds into high-risk investments".
Annuity complaints also rise
The Ombudsman also saw annuity complaints rise above pre-pension freedom levels, as 170 new cases were opened in Q3.
Before George Osborne's reforms came into effect, the FOS had received about 150 annuity-related complaints per quarter on average.
Before rising 60% in the last quarter, annuity-related complaints had dropped to pre-pension freedom numbers in Q1 and Q2 of 2016/17.
Personal pension complaints, on the other hand, dropped from 532 to 439, following a spike in Q2.
However, this still topped the average 380 complaints per quarter seen in the 2015/16 financial year.
Investment ISAs also saw a drop, albeit a smaller one. The Ombudsman saw 312 new complaints in the last quarter compared to 339 in Q2.
The FOS received a total of 70,908 complaints in the third quarter of the financial year, down on the 78,989 complaints it saw between July and September. Payment Protection Insurance (PPI) claims once again made up for more than half of the complaints directed to the organisation.
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