Self Invested Personal Pension Providers
SIPPs, or self-invested personal pensions, are a type of government approved personal pension that allows the pension holder the freedom to choose exactly where they would like to invest their funds.
Generally speaking, SIPPs are for the more knowledgeable, sophisticated and affluent investor. They have also become the vehicle of choice for pension scammers. Between 2009 and 2012, and then from 2014 until 2017, unscrupulous companies and often unregulated advisers have persuaded thousands of pension holders to move some or all of their perfectly safe and adequately performing pensions into SIPPs and then, in turn, into unregulated investments. Pension holders have seen their funds stripped via substantial commissions and in many cases, their whole investment lost.
SIPP providers make their money by charging administration fees. These may be only a few hundred pounds each year but get enough of these on your book and it can all amount to be a substantial residual income paid through the lifetime of the SIPP. Unfortunately, we now know that may SIPP providers were poorly run and, in many cases, it’s now apparent that there was little, if any, due diligence on the paperwork transferring pensions in and, indeed, the investments out of the SIPP.
Some SIPP providers have already been declared in default by the Financial Services Compensation Scheme and more are teetering on the brink, with many more known to have a raft of claims against them.