FSCS Pays Out £24.5 over Liberty SIPP In 6 Months
The lifeboat fund has now paid out £24.5m over Liberty Sipp after declaring it in default in January.
The Financial Services Compensation Scheme (FSCS) had now paid out £24.5m in compensation over claims against collapsed Sipp provider Liberty Sipp.
Liberty Sipp was declared in default by the FSCS in January this year after falling into administration in April 2020. Prior to this, the assets of the Liberty Sipp book were acquired by Embark in 2018.
The FSCS said many Liberty Sipp customers were advised to transfer their existing pensions into a Sipp with the provider via both FCA-authorised advisers and unauthorised firms. After the transfer, many customers had their funds placed in high-risk, non-standard investments, some of which have since become illiquid, meaning they cannot be sold or traded.
In early 2018, claims firms launched a host of complaints against the Sipp provider at the Financial Ombudsman Service (FOS) over unregulated investments it held, including collapsed Costa-Rican scheme Ethical Forestry.
The FSCS told Citywire New Model Adviser that as at 3 June this year, it had received a total of 1,769 claims against Liberty Sipp and had paid out just over £24.5m in compensation.
In the latest administrator’s report filed at Companies House in May, administrators Alex Cadwallader and Andrew Poxton of Leonard Curtis said they had written to 2,903 clients identified as having potential complaints against Liberty Sipp providing guidance on how to make a claim at the FSCS.
The administrators said there are also a number of ongoing legal proceedings against the company relating to non-standard investments that have currently been stayed, and the outcome of the Adams V Carey Pensions case is likely to have an impact on further proceedings.