MP Claire Hanna has called on the government to intervene in the Hartley Pensions saga to help Sipp holders.
Hanna, who is the MP for Belfast South, has written to Treasury committee chair Harriet Baldwin and pensions minister Paul Maynard asking them to investigate the Hartley Pensions issue.
In the emails, seen by FT Adviser, Hanna outlined how her office had been contacted by a constituent raising concern over their Sipp with Hartley Pension.
The person in question has a pot worth almost £2mn but is worried he could lose 50 per cent of his pot if administrators UHY Hacker Young do not reach a “fair and reasonable” exit fee for Sipp holders.
Hanna said this constituent is “looking at having a lifetime investment axed in half through no fault of their own”.
The SDLP politician has therefore asked ministers to examine this issue.
Speaking to FT Adviser, Hanna said Sipp holders impacted by the administration have been “left in a state of limbo” and “have no reassurance on potential future charges, inclusive of a costly de-registration with fees being charged from HMRC and administrator fees”.
She said: “I am asking the Treasury and government to intervene and find a way to prevent de-registration of these Sipp's or develop actions that ensure a move swiftly with a fair and exit charge fee.
"We need a financial services that is regulated to prevent this from happening again, lifetime investments such as Sipps should at least be regulated as far to ensure there is at least partial protection from what the investor can't control which in this case was Hartley Pensions going into administration at the request of the FCA.”
In response, UHY Hacker Young said in the absence of funding from regulatory bodies the costs of the administration needed to be funded by an exit and administration charge.
The spokesperson said: “Unfortunately, no viable alternative to this model has been proposed.
“It would have been unfair to allow certain clients to transfer out ahead of others before an EAC is agreed, as those who remained would be subject to the full EAC rather than it being distributed between all clients.
“The structure of this charge has been designed to be as fair and as equitable as possible, so as not to fall too heavily on any individual customer.”
UHY Hacker Young said the charge was determined by the amount of work involved in the administration.
“That in turn has been determined by the problems discovered at Hartley, for example the flaws in internal controls, lack of detailed records and the prevalence of toxic assets,” the spokesperson said.
“We are very supportive of efforts to allow investors to access the Financial Services Compensation Scheme and to seek reassurances that HMRC will not use their discretion to deregister the Sipps, which would lead to tax charges.”
