Life and pensions adviser compensation claims fall 26%

Claims against life and pensions intermediaries fell by a quarter last year according to the Financial Services Compensation Scheme (FSCS).

The regulator says it saw a 26% drop in claims against this category, receiving 3,427 during 2009/10 compared to 4,634 in 2008/09.

Although the figures are not broken down further, the FSCS noted that this sub-class mainly comprises Mortgage Endowments, Pensions Review and Free Standing Additional Voluntary Contribution claims (FSAVCs).

More than half (52%) of life and pensions intermediary claims resulted in an offer of compensation, with the average payment being £6,858.

Overall, a total of 31,592 claims were received, an increase of 185% from 2008/09 while those completed doubled to 21,802.

Payment protection insurance (PPI) continued to lead the way, alongside investment complaints, combining for two thirds of the £204m compensation paid in the year.

PPI claims increased significantly during the year, rising to more than 2,400 and the FSCS expects the numbers of claims in this area to continue to grow in 2010/11.

These are mainly a result of failed credit brokers, and the FSCS vowed to update firms further on PPI when its half year update is published.

Mark Neale, chief executive of the FSCS, believes it achieved a huge amount.

"We completed a large number of claims, resolved outstanding issues from the banking failures, and made significant investment in response to the demands for faster payout and our increased responsibilities," he says.

"The Annual Report and Accounts 2009/10 gives a detailed insight into the challenges the Scheme faced as well as its achievements and demonstrates the vital service the FSCS provides to consumers and the benefits that it brings to the industry in delivering consumer protection and promoting consumer confidence."