The Financial Services Compensation Scheme has been bolstering its staff numbers amid increasing amounts of complex complaints as it prepares to deal with a further influx of Sipp cases.
Speaking at a Treasury select committee hearing today, FSCS chief operating officer Jimmy Barber said that the FSCS has been recruiting, increasing its numbers of staff in teams in Glasgow in particular.
He added: “We are also looking at improving efficiencies of some of our processes to make sure we can handle these claims as effectively as possible.
“So I think we absolutely are alive to any potential issues there are in Sipps operating space.”
MP for Gordon Colin Clark asked Barber: “What are you doing regarding to emerging risk of an increase in these Sipp claims?”
Clark also asked: “Why did you take so long on the [collapsed provider] Lifetime Sipp company? People hold that up as a kind of a disaster in how it has been handled.”
Barber explained that while he regretted the time it took compensation to go through, cases such as Lifetime’s collapse are rare and novel for the lifeboat fund to have to deal with.
“This is a new type of failure for us. You have to bear in mind that we declared our first Sipp provider as failure only last January.
“So when we got to Lifetime, it was the first time we looked at that kind of failure, and it took us quite some time to establish that there were protected claims in there.
“Now we are in the process of working out and handling those claims. The novelty of Lifetime took us longer than perhaps would be ideal for a customer.
“We do keep customers informed through our progress throughout that. We had to involve a lot of legal experts, to try to unpick business models involved in these cases which can be very complex.
“They can involve a lot of assets, e.g. Caribbean assets, Australian wheat farms, or Ukrainian energy and and we have to evaluate these .”
The FSCS opened the door to claims against The Lifetime Sipp Company on 14 June. Lifetime Sipp was placed into administration in March 2018 and later went into liquidation on 2 April 2019.