£2bn lost in retirement savings as providers and advisers go out of business: FSCS

More than 43,000 claims have been received by the Financial Services Compensation Scheme (FSCS) since 2019 for total pensions losses reaching almost £2 billion when authorised financial providers and advisers went out of business, with four out of five made by men.

The FSCS is only able to step in and pay compensation on pension and Self-Invested Personal Pension (SIPP) claims protected under its compensation rules, which typically limits the compensation available to £85,000. As a result, the FSCS has paid approximately £1.2 billion in compensation relating to pension and SIPP products.

The data highlights the extent of the problem facing workers across the UK planning for retirement, with millions of pounds in savings lost every year from authorised financial providers or advisers going out of business.

The analysis also shows that most claims for pensions losses have come from men over the age of 45; 77% of the pension and SIPP claims handled by FSCS since 2019 have been made by men, with 95% of all claimants aged between 45 and 75.

Martyn Beauchamp, interim chief executive at the FSCS, said: “The financial loss to people’s pensions that we see in our claims is substantial and has serious consequences for thousands of people every year.

“FSCS has long highlighted the importance of checking that your pension savings are protected, as these types of claims often come to us long after the financial harm may have occurred – and by that point it can often be too late to rebuild before retirement."