By Amy Austin.
The Financial Services Compensation Scheme (FSCS) is expecting to pay out £39.6m on claims against troubled self-invested personal pensions (Sipp) provider Lifetime Sipp, but claims could double yet.
According to the latest liquidator’s report, published on Companies House last week, as of April 2020 the FSCS had agreed claims totalling £36.9m from 753 creditors, of which £24.8m had been paid to consumers.
The FSCS is also processing claims from a further 241 creditors – however no value has been put on these claims yet.
But many more claims are expected, as according to the liquidators, the “vast majority” of creditors, more than 1,000, are yet to either submit claims to the FSCS, or complete the process of evidencing their claim to allow them to receive compensation.
The report stated: “This process is ongoing and we are assisting the FSCS with their enquiries.
“Due to the ongoing nature of this, it is difficult to determine how long this process may still take. However, based on current progress, it is not unreasonable to assume a further two or three years.”
A significant number of consumers had also submitted claims to the Financial Ombudsman Service.
The report stated: “Hartley Pensions Limited have assisted in this matter and have been liaising directly with the Fos to ensure complaints are dealt with efficiently and that, if appropriate, the relevant claims are then made to the FSCS.”
Lifetime Sipp appointed administrators Kingston Smith & Partners, now known as Moore Kingston Smith & Partners, at the end of March 2018 to try and salvage the situation after receiving claims from unhappy investors.
At the time of administration, lawyers representing claimants warned the FSCS, which is funded by the industry, could be hit with as much as £3.5m in claims related to Lifetime Sipp.
The firm went into liquidation on April 2, 2019 and was declared in default by the FSCS on June 13, 2019.
FTAdviser learned the troubled Sipp firm had started to transfer 40 per cent of its Sipp book to Hartley Pensions in January 2018, ahead of going into administration.