Have You Been Mis-sold a Self-Invested Personal Pension (SIPP)?

The options for people planning for their retirement have expanded considerably in recent years.

Some of us plan to live off savings, some plan to buy a property and rent it out (read more: conveyancing quotes).

A few have even opted for the FIRE lifestyle (Financial Independence, Retire Early), aiming to spend as little as possible and save aggressively so they can retire in their 40s.

sipp pension piggy bank

The SIPP, or self-invested personal pension, was another innovative option that aimed to give savers more choice and more control. Unfortunately, SIPPs have proven to be controversial.

If you suspect you have been mis-sold a self-invested personal pension, you may be entitled to make a claim.

Please note: The contents of this page are provided for information only. The Quittance financial mis-selling panel does not currently have the capacity to handle mis-sold SIPP claims.

What is a SIPP?

The self-invested personal pension was introduced in 1989 to give people more control over their individual pensions.

Instead of your money being locked into a huge pension scheme offering relatively small returns, you could invest your pension where you wished.

Tempted by promises of much higher returns, many pension holders switched to SIPPs.

SIPPs were initially expensive to set up, and therefore did not have mass-market appeal. In recent years, however, many more SIPPs products came on the market, targeted at average earners.

SIPPs complaints

Given the flexibility and high returns promised by SIPPs, perhaps it is not surprising that mis-selling complaints began soon after their introduction.

Complaints initially related to hidden fees and other SIPP set-up costs, but the FCA (Financial Conduct Authority) now face complaints relating to SIPPs’ failure to deliver promised returns.

In some cases, riskier investments have collapsed entirely, leaving pension holders with nothing.

Some SIPPs were sold using high-pressure tactics, and the risks of the proposed investment were undersold. As a result, people invested in SIPPs expecting a high return without being aware of the risks.

Some financial advisors also mis-sold SIPPs to average earners for whom a high-risk investment product would be totally unsuitable. In theory, at least, SIPPs should only have been sold to experienced investors who could afford to take the risk.

Do I have a SIPP?

Your pension investment may not have explicitly been called a “self-invested personal pension”, but it could still be a SIPP.

You may be able to claim compensation for a mis-sold pension investment product if the SIPP invested in a non-standard asset. Examples of these assets include:

  • Land, including forestry or farmland
  • Unlisted shares
  • Investments on foreign exchanges
  • Car parking schemes & burial plots
  • International property or holiday resorts
  • Solar, wind and other renewables

Was your SIPP mis-sold to you?

The short answer is, maybe.

Just because your SIPP has not delivered promised returns does not necessarily mean your pension was mis-sold.

Your pension, however, could potentially have been mis-sold if:

  • High-pressure sales tactics were used
  • Your advisor charged an excessive fee
  • Some or all of the fees associated with the SIPP were not clearly explained
  • The risks of investing were not clearly explained.

You may also be the victim of SIPP mis-selling if the pension you had at the time was suitable for your needs, and this was not explained to you.

Despite action from the FCA and the Government, SIPPs continue to be mis-sold today.

Howard Willis, Personal injury solicitor

About the author

Howard qualified as a solicitor in 1984 and has specialised in personal injury for over 25 years. He is a member of the Association of Personal Injury Lawyers (APIL) and is a recognised Law Society Personal Injury Panel expert.

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