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Complaints push Sipp provider into loss

Complaints push Sipp provider into loss

Sipp provider Carey Pensions posted a loss of £153,800 in 2016 due to an increase in the number of claims it faces. 

Financial statements filed at Companies House for Carey Pensions UK LLP revealed the Sipp business moved from a profit before members' remuneration of £166,600 in 2015 to a loss last year. 

Carey attributed the move to the loss in its financial statements to 'a number of complaints and legal cases relating to some historic business which is now being run down'.

Christine Hallett (pictured), chief executive of Carey Pensions, said she could not comment on the nature of the claims further on the potential value of the complaints or legal matters because they were ongoing cases. 

'These matters relate to investments into Sipps made on an execution only basis in the period 2011-13,' she added. 

The financial statements showed the company put £70,800 aside to cover liabilities including claims in 2016. In 2015 it did not put aside any new money but used an existing provision of £75,000. 

Carey posted a turnover of £1.6 million in 2016 compared with a turnover of £1.8 million in 2015.

Administrative expenses also increased from £1.6 million in 2015 to £1.8 million last year.

A note in the financial statements revealed the LLP agreed a new subordinate loan agreement with Carey Administration Holdings Limited on 12 January this year. 

Subordinated loans are loans which fall below other claims if a company becomes insolvent. They are sometimes used by financial services companies to loan money to another business within the same group.  

In this case Carey Administration Holdings Limited agreed to loan Carey Pensions UK LLP £950,000, with interest payable at 5% above Libor. The loan has no fixed repayment date, but can be recalled any time from 13 January 2019. 

The note added that on 24 March Carey Pensions UK LLP agreed to increase the value of the loan to £1.1 million. Of this £500,000 was converted into equity 'in order to to satisfy the increased capital adequacy requirements of the Financial Conduct Authority'.

Hallett said: 'We always meet our capital adequacy requirements, however these adjustments were made to strengthen our the capital base.'

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